The photos are one week apart, happy to have some warmer temperatures but drive safe everyone. Wishing everyone a Happy New Year! Wishing everyone health and prosperity in 2023!
As January approaches, the new year brings some major changes to the real estate landscape in British Columbia. Many of these changes are designed by the different levels of Government to protect the consumer, with the underlying purpose of the changes being to increase supply and give consumers more options.
On January 1st and 3rd, two new major rule changes are coming into effect that will impact how real estate is being done.
Here is what you need to know about the Home Buyer Recission Period, the Ban on Foreign buyers and the removal of strata rental restrictions and age restrictions.
Buyer Recission Period (Provincial) (also known as the cooling off period)- This is coming into effect on January 3rd, 2023, and will give buyers of a property a three-business day to rescind/cancel a contract to purchase residential real property.
Anyone that chooses to rescind or cancel the contract within the three business day period is subject to a fee of 0.25% ($2,500 on a $1M property). The impact of this rule applies to both subject-free offers and offers that have other subject conditions. If, for example, a contract may provide five days to remove a subject to a financing condition. If the buyer wished to rely on that one condition to get out of the contract they would have to prove they tried to get financing but were unsuccessful or they could be subject to the fee.
Foreign Buyer Ban(Federal)- Just finalized on December 20 but it was anticipated for months; effective on January 1st, 2023 is a complete ban on foreign buyers in real estate within Canada's Census Metropolitan Areas. These changes are applicable to purchasers of residential properties (less than 3 units) that are non-Canadian ( Definition-neither a Canadian citizen nor permanent resident) as well as corporations, that have more than 3% foreign Ownership. The legislation includes a $10,000 fine for both non-Canadian buyers who violate the ban and anyone who knowingly helps them. A court can also order the sale of the property, and won’t return to the buyer any more than the price paid to purchase the property.
As with anything, there are exemptions, the act does not apply to areas outside the Census Agglomeration or Census Metropolitan Area. This means that the areas of Kelowna, West Kelowna, Peachland, Lake Country, and Kamloops are subject to the legislation but most of the South Okanagan (including Penticton and the Kootenays) are exempt. It also does not apply to commercial properties or residential properties with four or more dwellings.
To view the geographical region map this applies to click here.
According to BCREA in 2022, foreign buyers in British Columbia accounted for less than 0.5% of residential housing sales. For such a small impact the ban in my opinion will give more of a bad taste to foreigners on the world stage and send a message to not invest in Canada. Although, a foreign company can buy a business here in Canada and employ Canadians, the owners of the company will not be able to purchase a residential home until they either become a Canadian citizen or a permanent resident, or purchase a home outside the CMA areas.
Removal of Age Restrictions and Rental Restrictions (Provincial)- On November 24, 2022, the BC Government passed amendments to the Strata Property Act which take immediate effect. There are two significant changes impacting strata properties,
• all rental restriction bylaws are removed, except for bylaws restricting short-term rentals such as Airbnb or Vrbo, and
• all age restriction bylaws are removed, with the exception of “seniors only” (55-plus) rules. This means that a strata will no longer be allowed to have 19-plus age restrictions.
The changes are relatively new, if you do have any questions feel free to reach out.
Have a great week and feel free to reach out if there is ever anything I can do for you!
Personal Real Estate Corporation
Selling Kelowna Real Estate Group