current policy

1. Overview of the GST Relief for First-Time Buyers

• Policy: The federal government (announced by Prime Minister Mark Carney) will eliminate the 5% GST for first-time buyers purchasing newly constructed homes valued up to $1 million CAD and provide a phased rebate for homes between $1 million CAD and $1.5 million CAD.

  • Savings: Up to $50,000 CAD (full GST exemption on a $1M CAD home).

  • Phase-out: Linear reduction for homes priced up to $1.5M CAD (e.g., 50% rebate at $1.25M CAD = $25,000 CAD savings).

    
    

2. Eligibility Criteria

To qualify for the First-Time Home Buyers’ (FTHB) GST Rebate, you must:

• Be a first-time buyer:

  • No home ownership (globally) by you or your spouse/common-law partner in the current year or past 4 calendar years.

• Property type:

  • Newly built homes (purchased from a builder or self-built).

  • Co-op housing shares (if the unit is new).

• Residency:

  • Canadian citizen or permanent resident.

  • Primary residence: Must occupy the home within 1 year of purchase.

3. Key Dates and Application

• Effective date: Applies to purchase agreements signed on or after May 27, 2025.

• Construction deadlines:

  • Construction must begin before 2031 and be substantially completed by 2036.

• How to claim:

  • The rebate is typically applied at closing by the builder (for new homes) or claimed via tax filing (for self-built homes).

4. Limitations and Exclusions

• Lifetime limit: The rebate can only be claimed once per individual (or spouse/common-law partner).

• Assignment sales: No rebate if the original purchase agreement was signed before May 27, 2025.

• Excluded properties:

  • Homes over $1.5M CAD.

  • Resale homes or rentals.

5. Interaction with Other BC Programs

• Property Transfer Tax (PTT) Exemption: First-time buyers in BC may also qualify for a full or partial PTT exemption on homes ≤$835K CAD (saving up to $8,000 CAD).

• Newly Built Home Exemption: Separate PTT relief for new constructions ≤$1.1M CAD.

6. Purpose and Impact

• Affordability: Aims to reduce upfront costs for young buyers and stimulate new housing supply.

• Federal-provincial alignment: Complements BC’s existing incentives (e.g., PTT exemptions).

For official forms or further details, refer to the Government of Canada’s announcement2 or consult a tax professional.

The BC (British Columbia) government introduced the Property Flipping Tax in 2025 to combat speculative behavior in the real estate market. This tax aims to target the buying and selling of properties within a short period to gain profit, ensuring a more stable real estate market and protecting long-term housing needs.

What is the Property Flipping Tax?

The Property Flipping Tax is a tax levied on the sale of properties that are purchased and resold within a short period to make a profit. According to the BC government, if a property is sold within two years of purchase, the seller may be required to pay the additional property flipping tax unless certain exemption conditions apply.

Tax Rate and Calculation Method

• Tax Rate: The Property Flipping Tax rate is 20% of the profit made from the sale.

• Applicable Scope: This tax applies to properties purchased on or after January 1, 2025 and sold within two years.

• Calculation Basis: The tax is calculated based on the difference between the sale price and the purchase price (the profit).

Tax Payment Based on Property Holding Period

1. Less than 1 year (within 365 days): If the seller holds the property for less than 1 year, they must pay 20% of the profit as the property flipping tax.

2. 1-2 years (between 366 to 730 days): If the seller holds the property between 1 and 2 years, they will pay the tax proportionally. For example, if the property is sold after 18 months, they would pay 10% of the profit as the property flipping tax.

3. More than 2 years: If the seller holds the property for more than 2 years, they are not required to pay this tax.

4. Assignment Properties: For assignment sales (pre-construction units), regardless of the holding period, the seller must pay 20% of the profit as the property flipping tax.

*Note: If the property is a primary residence, the seller may be eligible for up to $20,000 CAD in exemptions.

Exemption Conditions

Not all short-term sales are subject to the property flipping tax. The following situations may qualify for an exemption:

1. Life Events: Such as divorce, unemployment, illness, or death.

2. Job Relocation: If the seller needs to move due to a change in work location.

3. Safety Reasons: If the property has safety issues that make it uninhabitable.

4. Newly Built Homes: Selling newly constructed or extensively renovated homes.

5. First-time Homebuyers: Eligible first-time homebuyers may qualify for an exemption.

Example

Let’s say Mr. Zhang bought a property for $1,000,000 CAD on January 1, 2025, and sold it for $1,200,000 CAD on June 1, 2026. Since he sold the property within 2 years and does not meet any exemption criteria, he is required to pay the property flipping tax.

• Profit: $1,200,000 CAD (sale price) - $1,000,000 CAD (purchase price) = $200,000 CAD

• Property Flipping Tax: 200,000 × 20% = $40,000 CAD

Therefore, Mr. Zhang would owe $40,000 CAD in property flipping tax to the BC government.

Policy Objectives

1. Combat Speculation: Prevent investors from artificially inflating property prices in the short term, stabilizing the market.

2. Protect Long-Term Housing Needs: Encourage properties to be used for personal residence or long-term ownership rather than short-term speculation.

3. Increase Government Revenue: The revenue generated from the property flipping tax can be used to fund affordable housing and other public services.

Important Notes

• Tax Planning: If you plan to sell a property in the short term, it is advisable to consult a tax expert to understand if you qualify for any exemptions or how to minimize your tax burden.

• Market Impact: This policy may reduce the number of short-term investors, stabilizing property prices, but it could also affect the liquidity of the real estate market.

Starting from June 25, 2024, Canada will increase the Capital Gains Inclusion Rate from the current 50% to 66.67%.

When you sell an asset (such as stocks, art, collectibles, real estate, etc.) and make a profit, you are required to pay Capital Gains Tax on that profit. For individuals, the Capital Gains Inclusion Rate will increase from 50% to two-thirds for capital gains over $250,000 CAD annually, as well as for companies and most types of trusts on all capital gains.

Example of Calculating Capital Gains Tax:

Suppose you bought a property in 2010 for $100,000 CAD and sold it in 2025 for $200,000 CAD. The capital gain is $100,000 CAD. According to the new rules, two-thirds of the gain, which is $66,667 CAD, will be included in your taxable income and taxed according to your income tax bracket.

Strategies to Reduce Capital Gains Tax Liability:

1. Utilize Tax-Advantaged Accounts (e.g., TFSA): Place your investments in a tax-free savings account (TFSA), so the investment income is exempt from capital gains tax.

2. Delay the Sale of Assets: If possible, delay the sale of assets to take advantage of potential future tax benefits.

3. Tax Loss Harvesting: Sell assets that have incurred losses in the same tax year to offset the taxable gains on other appreciating assets.

On January 1, 2023, Canada implemented the "Prohibition on the Purchase of Residential Property by Non-Canadians Act," which aims to limit the ability of non-Canadian citizens and non-permanent residents to purchase residential property in Canada in order to alleviate the housing supply crisis. The ban was initially set to last for two years. However, on February 4, 2024, the Canadian Minister of Finance announced the extension of the ban for an additional two years, until January 1, 2027. Therefore, non-Canadians are currently prohibited from purchasing residential property in Canada until January 1, 2027.

Key Details:

Prohibited Parties:

• Non-Canadian citizens

• Non-permanent residents

• Companies controlled by foreigners

Prohibited Action:

• The purchase of residential property within Canada.

Exceptions:

Although the law imposes restrictions on non-Canadians purchasing residential property, there are several exceptions:

• Temporary Residents: Temporary residents holding a valid work or study permit may purchase residential property, provided they meet specific conditions.

• Refugees: Individuals recognized as refugees are exempt from the prohibition.

• Diplomats: Diplomats and their families, while performing their duties in Canada, may purchase residential property.

• Spouse of a Canadian Citizen: If the spouse of a non-Canadian is a Canadian citizen or permanent resident, the non-Canadian may purchase residential property.

Consequences for Violating the Law:

If a non-Canadian violates the law by purchasing residential property, they may face a fine of up to $10,000 CAD and may be required to sell the property.

Example:

Suppose a foreign national holding a valid work permit is working in Vancouver and wishes to purchase a home. According to the law, this person qualifies as a temporary resident and may purchase residential property if certain conditions are met. However, this person would still need to consider other applicable taxes, such as the foreign buyer's tax.

It is important to note that the details and scope of the law may change over time. Therefore, non-Canadians intending to purchase property in Canada should consult a legal professional to ensure compliance with the relevant regulations.

Starting on January 3, 2023, British Columbia implemented a new homebuyer protection policy known as the "Three-Day Cooling-Off Period." This policy is designed to give homebuyers three business days to carefully consider their purchase, ensuring that necessary financial and property inspections are completed, and helping to avoid impulsive or pressured decisions that could lead to unwise home purchases.

Key Points of the Cooling-Off Period:

• Duration: The cooling-off period begins the next business day after the sale agreement is signed and lasts for three days.

• Right to Cancel: During this three-day period, the buyer can unilaterally decide to cancel the transaction.

• Cancellation Cost: If the buyer chooses to cancel the deal, they must pay a compensation fee of 0.25% of the purchase price. For example, if the price is CAD 1 million, the cancellation fee will be $2,500 CAD.

Example Case Analysis:

Suppose you sign a purchase agreement on February 1, 2025 (Monday) with the seller for a house priced at $800,000 CAD. According to the rules, the cooling-off period would start on February 2 (Tuesday) and end on February 4 (Thursday). During this period, you could:

• Hire an inspector to conduct a home inspection to ensure there are no major structural issues or repair needs.

• Confirm with the bank or lender that the mortgage loan has been approved to ensure funds are in place.

• Reflect on your financial situation and assess if continuing with the purchase is still suitable for you.

If, during the cooling-off period, you decide not to proceed with the purchase, you can choose to withdraw from the transaction. However, you will need to pay a compensation fee of 0.25% of the purchase price, which in this case would be $2,000 CAD, to the seller.

Scope and Exceptions:

This rule applies to most residential real estate transactions, including properties sold directly by individuals, but certain types of properties may be exempt. Additionally, buyers can still include conditions in the purchase agreement, such as home inspections or mortgage approval conditions, to ensure additional protections beyond the cooling-off period.

This measure was introduced to establish a fairer mechanism in the real estate market, giving buyers more time to conduct necessary inspections and evaluations, thus avoiding rushed decisions. It also ensures that sellers are not at risk of losing money due to unjustified last-minute cancellations.

The term "multiplex" in the Metro Vancouver context refers to small-scale, multi-unit housing types—such as duplexes, triplexes, four-plexes, and townhouses—that are now being permitted on what were traditionally single-family detached lots. This represents a fundamental shift in urban policy, moving away from exclusive single-family zoning toward "gentle density" or "missing middle" housing to create more diverse, sustainable, and inclusive communities.

Detailed Policy Breakdown

1. Vancouver

• Policy Status: Most permissive and fully implemented.

• What's Allowed: On a standard single-family (RS) lot, you can build:

  • 3 to 4 units as a baseline.

  • 5 to 6 units if one is offered at below-market rent.

  • Up to 8 units on larger lots with an affordable unit.

• Laneway/Carriage Houses: Yes, but they are included within the total unit count for the site.

• Parking: No minimum parking requirements in Frequent Transit Areas.

• Overall Approach: A blanket upzoning to allow small apartment buildings on every lot, aiming for the highest gentle density.

2. Burnaby

• Policy Status: Newly adopted (Late 2023), a significant shift.

• What's Allowed: The allowed form depends on lot size:

  • Duplexes on all standard lots.

  • Triplexes and Four-plexes on larger lots (over ~3,700 sq ft).

  • Townhouses (3-6 units) on very wide lots (over 50 ft).

• Laneway/Carriage Houses: No. This is the key difference. The multiplex is the only form of gentle density allowed.

• Parking: Reduced requirements, but some parking is still typically required.

• Overall Approach: A clear move to allow multiplexes city-wide, but without the complexity of also allowing laneway houses. It's a "middle-ground" approach.

3. Richmond

• Policy Status: Most restrictive for true multiplexes. Relies on the "House + Suite + Laneway" model.

• What's Allowed: On a standard single-family lot:

  • A principal house, one secondary suite, and one laneway OR coach house.

  • This creates a maximum of 3 units without going through a rezoning process.

• Laneway/Carriage Houses: Yes, and this is the primary way to get a third unit.

• Future Plans: Richmond is officially studying "missing middle" housing (like four-plexes), but this is not yet policy. Any change would likely be after significant public consultation.

• Overall Approach: Cautious and incremental. Focused on density in town centres and along corridors, with gentle density limited to the existing suite/laneway model for now.

4. Surrey

• Policy Status: Pioneering and fully implemented. Surrey was one of the first to allow laneway houses city-wide.

• What's Allowed: On a standard single-family (RF) lot:

  • A principal house, one secondary suite, and one laneway house.

  • This creates a maximum of 4 units without rezoning.

• Laneway/Carriage Houses: Yes, and they are a central part of the strategy.

• Other Options: Surrey also has specific zones for small-scale multi-unit projects like cottage courts and townhouses, but the 4-unit model is the city-wide standard for single-family lots.

• Overall Approach: Pro-development and focused on gentle density through the combination of a main house, a suite, and a laneway house. This provides a "missing middle" option but doesn't go as far as Vancouver's small apartment buildings.

5. Coquitlam

• Policy Status: Ambitious and recently adopted (Early 2024).

• What's Allowed: Coquitlam's policy is nuanced and based on lot size and location:

  • Standard Lots: Typically allow a triplex.

  • Larger Lots (Corner Lots, etc.): Can allow four-plexes, five-plexes, or even six-plexes.

  • Like Vancouver, there are provisions for additional units (up to 6 total) if affordable housing is provided.

• Laneway/Carriage Houses: Yes, on most lots. Coquitlam will allow a laneway or coach house in addition to a multiplex on the same lot, which can significantly increase the total unit count.

• Overall Approach: A very ambitious and forward-thinking policy that rivals Vancouver's in its permissiveness. It combines the multiplex model with the option for laneway houses, aiming for maximum gentle density.

In the Greater Vancouver area, particularly in Vancouver City, there are clear regulations governing the operation of short-term rentals like Airbnb. Here are the key rules:

1. Definition of Short-Term Rentals:

   • Rental Period Limitation: In September 2024, the Vancouver City Council updated the short-term rental policy, extending the definition of short-term rentals from "less than 30 days" to "less than 90 days."

   • According to the updated Vancouver City short-term rental regulations from September 2024, you cannot use your secondary property (non-primary residence) for Airbnb or other short-term rental platforms. Short-term rentals are only permitted in your primary residence, meaning you must actually live in the property and can only rent out a portion of the residence, such as a room or part of a floor.

   • If your secondary property is a detached house’s laneway house or secondary suite, these cannot be used for short-term rentals.

2. Exceptions:

   • Long-Term Rentals (over 90 days): If you want to rent out your secondary property, you can consider long-term rentals (with leases longer than 90 days), which are not subject to short-term rental rules.

   • Different Regulations in Other Areas: If your secondary property is located in other cities in Greater Vancouver (such as Richmond, Burnaby, or Surrey), the local short-term rental regulations may vary, so it’s advisable to check the specific rules for that city.

3. Permit Requirements:

   • Primary Residence Only: Only your primary residence can be used for short-term rentals. Any vacant units, secondary suites, or laneway houses are prohibited for short-term rental purposes.

   • Permit Application: All short-term rental operators must apply for a short-term rental permit. Starting from September 12, 2024, Vancouver residents can apply for permits online and obtain approval.

4. Penalties:

   • Violation Fines: If landlords fail to comply with the regulations, individual landlords may face fines ranging from $500 CAD to $5,000 CAD, while businesses could be fined up to $10,000 CAD per day.

5. Other Regulations:

   • Platform Responsibility: Short-term rental platforms like Airbnb and VRBO are required to provide data to the provincial government and must remove listings that do not display a valid permit number.

   • Enforcement Measures: Provincial enforcement units will investigate violations by individuals and companies and impose appropriate fines.