There are a lot of changes coming in 2023, but in particular I think the BC Home Buyers Rescission Period & the Foreign Buyers Ban are the most significant to my clients when looking at the year ahead. To offer some assistance, here is a breakdown of the two policy changes.
BC’S HOME BUYER RESCISSION PERIOD
BC’s new Home Buyer Rescission Period (HBRP) takes effect on January 1, 2023.
What is the Home Buyer Rescission Period?
Effective January 1, 2023 all buyers who write an offer on a property will have an automatic three business days to withdraw from a purchase agreement after an offer is accepted. Buyers who choose to exercise their right to rescind will be expected to pay 0.25% of the purchase price as a penalty.
HBRP applies if the property is:
– a detached house, 1/2 duplex, townhouse, apartment / multi-unit dwelling
– a residential strata lot as defined in section 1(1) of the Strata Property Act,
– a manufactured home affixed to land, or
– a cooperative interest, which includes the right of use or occupation of the dwelling.
The HBRP does not apply to exempt properties as follows:
– residential real estate property that is located on leased land,
– leasehold interest in residential real estate property,
– residential real estate property that is sold at auction, and
– residential real estate property that is sold under a court order or the supervision of a court.
Can I waive the HBRP? No you cannot waive this right of rescission. All offers (except those properties listed above) will be subject to the rescission period.
How does a HBRP impact other subjects in my contract? Other subjects (i.e.: Inspection, Financing, strata docs) are unaffected by the HBRP.
BAN ON FOREIGN BUYERS FOR TWO YEARS
Did you know that starting January 1, 2023, non-Canadians will be banned from buying homes across Canada for two years? The federal government has not yet released supporting regulations for the foreign buyer ban, however, here is what we do know:
Beginning January 1, 2023, persons who meet the definition of “non-Canadian” under the Act will be subject to the Ban, including:
– Individuals who are neither a Canadian citizen nor a permanent resident of Canada.
– Corporations incorporated outside of Canada.
– Corporations “controlled” by foreign corporations or individuals who are not permanent residents of Canada or Canadian citizens (with “control” to be defined in the Anticipated Regulations)
The Ban will apply to certain property located in Canada that meets the definition of “residential property” under the Act, including:
– Detached houses or similar buildings containing three dwelling units or less.
– A part of any building that is a rowhouse, semi-detached house, residential condominium or other similar premises intended to be owned apart from other units in the building; and
– Such other residential properties to be listed in the Anticipated Regulations.
Why did the government introduce this new regulation?
In an effort to make housing more affordable. The government explained that this was a move to cool down a hot market after housing prices climbed by more than 20% in 2021.
These are two very large changes on our local real estate industry and will no doubt have some growing pains as everyone adapts to the new forms/regulations and implications. If you have any questions, and I am sure you do, please don’t hesitate to reach out to me today and I would be happy to help.