As 2016 winds down, we're looking ahead to updates being made to Ontario's real estate policies that will begin rolling out in the new year. Two changes in particular will alter how we view buying and selling houses.
Starting January 1st, first-time homebuyers will be eligible to receive a refund of up to $4000 from the land transfer tax rebate (twice the current refund of $2000 for new homebuyers). The increase in this rebate will hopefully encourage more young people to make their first big purchase by reducing their closing costs and helping them save money for their down payment.
You can read more about the First-time Homebuyer's Land Transfer Rebate in the Ottawa Citizen.
The second big change comes from the Canada Revenue Agency, and will affect something that many Canadians know little about: taxation on primary residences.
Most home sellers know that the gains of their sale are protected from taxation by the Primary Residence Exemption (PRE). Other properties, however--like vacation homes, or homes that buyers "flip" and re-sell--are not primary residences, and therefore are not exempt. The CRA will soon make reporting every sale of a primary residence on your tax forms mandatory, whether you owe taxes on the property or not. A key thing to note is that foreign investors in Canadian real estate will now be forced to abide by Canadian tax rules, as will Canadians who often dodged paying tax on their primary residences in the past.
Still have questions? Give us a call, or send us an email--we're always ready to give you up-to-date information on what you need to keep your property finances in order!