Big Changes not only in Canadian Real Estate But Also In BC's Real Estate : What You Need to Know Heading into 2025 for Kelowna Real Estate Market
The past couple of years have brought some of the most significant shifts in the real estate market—not just in terms of shifting demand, rising supply, and all eyes on interest rates. Beyond the headlines about rate hikes and drops, a wave of federal and provincial government changes has been introduced. These policies are shaping the decisions of buyers and sellers and adding new pressures to the housing market.
While interest rates tend to dominate conversations, there’s so much more influencing buyer and seller behavior heading into 2024. The good news? Interest rates are finally starting to ease, and with them, confidence is gradually returning to the market.
If you’re thinking about buying or selling in late 2024 or 2025, it’s essential to understand how these recent rule changes may affect your plans. Here's an overview of the key updates from the past few years and what they might mean for you. Every situation is unique, so if you’re wondering how these changes impact you specifically, feel free to reach out—I’m here to guide you through it!
Major Trends in Real Estate Changes Across Canada and British Columbia (2023-2025)
The real estate market in Canada, particularly in British Columbia, has undergone a series of transformative changes in recent years. These federal and provincial updates are reshaping the housing landscape, influencing how homes are built, sold, and rented. Here’s a closer look at the major trends driving these changes.
2023
January 1: Expansion of the Speculation and Vacancy Tax (SVT)
Announced: 2018; Expanded coverage announced in late 2022.
Effective: January 1, 2023.
Details:
The SVT was expanded to 13 additional municipalities in British Columbia.
Tax rates:
0.5% for Canadian citizens or permanent residents who are owners of vacant properties.
2% for foreign owners or satellite families.
Goal: Discourage housing speculation and ensure properties are used for housing.
April 1: Property Tax Changes
Newly Built Home Exemption Threshold Increased
Announced: BC Budget 2023.
Effective: April 1, 2023.
Details: Fair market value threshold for the exemption increased from $750,000 to $1.1 million. Partial exemptions available for properties slightly above the threshold.
Property Transfer Tax Exemption for First-Time Buyers Raised
Announced: BC Budget 2023.
Effective: April 1, 2023.
Details: Threshold increased from $500,000 to $835,000, making homeownership more affordable for first-time buyers.
September 14: Removal of GST on New Rental Housing
Announced: Federal housing measures in September 2023.
Effective: September 14, 2023.
Details:
GST rate reduced to 0% for the construction of new rental housing.
Applies to buildings with at least four units designated for long-term rental.
Goal: Increase rental housing supply by reducing construction costs.
November 2: BC Zoning Changes for Multi-Unit Housing
Announced: October 2023 by the BC government.
Effective: November 2, 2023.
Details:
Zoning laws changed to permit small-scale multi-unit housing (e.g., duplexes, triplexes) in areas previously limited to single-family homes.
Goal: Increase density and affordability in urban and suburban areas.
November 8: Transit-Oriented Development
Announced: October 2023 by the BC government.
Effective: November 8, 2023.
Details:
Legislation introduced to prioritize high-density housing near transit hubs.
Streamlines housing approvals in these areas to reduce urban sprawl.
December 7: Short-Term Rental Restrictions in BC
Announced: BC legislature fall 2023.
Effective: December 7, 2023.
Details:
Limits short-term rentals to a primary residence plus one secondary suite or accessory dwelling unit.
Goal: Free up more homes for long-term rental markets.
2024
January 1: Further Expansion of Speculation and Vacancy Tax (SVT)
Announced: BC Budget 2023.
Effective: January 1, 2024.
Details:
Additional municipalities included, with stricter enforcement of property status declarations.
Home Flipping Tax
Announced: Federal Budget 2023.
Effective: January 1, 2024.
Details:
Applies to properties sold within 12 months of purchase.
Exceptions: Life events like divorce, job relocation, or death.
Tax rate: Full profit inclusion as business income, taxed at individual rates.
April 1: Federal Capital Gains Tax Increase
Announced: Federal Budget 2024.
Effective: April 1, 2024.
Details:
Capital gains inclusion rate increased from 50% to 66.67% for profits exceeding $250,000.
Example: If an investment property sells for $300,000 in profit, $200,010 is taxable.
May 1: Additional Short-Term Rental Restrictions in BC
Announced: BC government early 2024.
Effective: May 1, 2024.
Details:
New measures restrict short-term rentals further, aiming to increase availability of long-term rental units.
June 30: Mandatory Municipal Zoning Updates
Announced: BC government 2023.
Effective: June 30, 2024.
Details:
Municipalities required to update zoning laws to:
Permit at least one secondary suite per property.
Allow 3-4 units on most lots.
Require 6 units near transit stops with frequent service.
Still To Come
December 15, 2024: Higher Insured Mortgage Price Cap
Announced: Federal housing measures 2024.
Effective: December 15, 2024.
Details:
Mortgage insurance price cap raised from $1 million to $1.5 million, providing more access to insured mortgages.
30-Year Amortizations for First-Time Buyers and New Builds
Announced: Federal housing measures 2024.
Effective: December 15, 2024.
Details:
First-time buyers and new-build purchasers can access 30-year amortizations, lowering monthly payments.
January 15, 2025: Insured Mortgage Support for Secondary Suites
Announced: Federal housing measures 2024.
Effective: January 15, 2025.
Details:
Homeowners can refinance insured mortgages to add secondary suites or multi-generational housing units.
2025: New Tax Exemptions for Purpose-Built Rentals
Announced: BC Budget 2024.
Effective: January 1 – December 31, 2025.
Details:
Applies to purpose-built rental developments, encouraging long-term housing supply through 2030.
Key Takeaways for Buyers, Sellers, and Homeowners
For Buyers: Increased exemptions and longer amortizations improve affordability.
For Sellers: Higher taxes on speculative flipping and capital gains require careful planning.
For Homeowners: New support for adding rental units creates opportunities for additional income.
Understanding these changes ensures you're prepared to navigate the evolving real estate market. If you have any questions about how these updates impact you, feel free to reach out for tailored advice! If you’re planning to buy, sell, or invest, these trends highlight the importance of staying informed about how federal and provincial policies affect your decisions. Whether you’re navigating rental markets or exploring ownership opportunities, understanding these trends is key to making smart real estate moves.
Mark Coons
Personal Real Estate Corporation
778-744-0872
Selling Kelowna Real Estate
eXp Realty
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