New legislation affecting real estate in 2023

New legislation affecting real estate in 2023

On January 1st, 2023, several new policies impacting buyers, sellers and real estate professionals in Canada were implemented. Here is a breakdown of the new policies:

Federal policies

Prohibition on the Purchase of Residential Property by Non-Canadians Act (Foreign Buyer Ban)

  • The federal government began prohibiting non-Canadians from purchasing residential properties in Canada for a period of two years, beginning on January 1, 2023. This legislation was implemented in an effort to make housing more accessible to Canadians.
  • According to the Act, a residential property includes detached homes, buildings with three dwellings or less, semi-detached homes, rowhouses or residential condominium units.
  • Penalties: The Act states that a non-Canadian that contravenes the prohibition, or any person or entity that knowingly assists a non-Canadian in contravening the prohibition, can be fined up to $10,000. In addition, a court may order the sale of a property purchased if a non-Canadian is found to have acquired property in contravention of the Act.
  • Exemptions include (but are not limited to) temporary residents who are working towards permanent residency, refugee claimants, and international students (if they meet certain criteria); recreational properties such as cottages or lake houses; and homes in municipalities with a population of less than 10,000, are not subject to this ban. The ban does not apply to non-Canadians who are looking to rent a residential property, or those with a spouse or common-law partner who is a Canadian citizen, permanent resident or person registered under the Indian Act.

Residential Property Flipping Rule (Anti-flipping Tax)

  • Profits arising from the sale of a residential property (including a rental property) sold on or after January 1, 2023, that was owned for less than 12 months are subject to full taxation as business income.
  • Under the new Rule, the Principal Residence Exemption (PRE) would not be available, meaning that the entire profit will be taxed as 100% business income.
  • If the owner loses money on the sale, the loss cannot be claimed as a business loss.
  • Exemptions include (but are not limited to) death, divorce or separation, disability or illness, insolvency, or other major life events.
  • New legislation is being considered to extend the anti-flipping tax to assignment sales and would apply to transactions occurring on or after January 1, 2023.

More information can be found on the Government of Canada’s website.

I am happy to answer your questions about the real estate market and the listing and buying processes.

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Deb Burgoyne


Royal LePage Team Realty

1723 Carling Avenue

Ottawa K2A 1C8

Phone: 613.725.1171

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