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The homebuyer protection period, the first of its kind in Canada, goes into effect on Jan. 1, 2023.

The B.C. government announced Thursday a new cooling-off period on real estate sales, a measure meant to protect homebuyers feeling pressured in high-risk sales.


The cooling-off period will give a buyer three business days following an accepted offer to conduct due diligence such as inspections, seeking legal advice and confirming financing. The cooling-off period is one of seven recommendations the B.C. Financial Services Authority made in May to protect consumers in B.C.’s real estate market.


 “Too many people have been faced with giving up an inspection in order to buy a home,” B.C. Finance Minister Selina Robinson said Thursday. “This is a major step toward providing homebuyers with the peace of mind they deserve while protecting the interests of people selling their homes — for today’s market and in the future.”

The homebuyer protection period includes a cancellation fee of 0.25 per cent of the purchase price, or $250 for every $100,000, for those who choose to back out of a deal. For example, if the purchaser cancels on a $1-million home, they would be required to pay $2,500 to the seller.

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Federal Government Releases Regulations on Prohibition
on the Purchase of Residential Property by Non-Canadians Act

What is the Prohibition on the Purchase of Residential Property by Non-Canadians Act?

On June 23, 2022, Parliament passed the Prohibition on the Purchase of Residential Property by Non-Canadians Act. Coming into force Sunday, January 1, 2023, this Act:

  • Does not apply to Canadian citizens or permanent residents.
  • Applies to non-Canadians directly or indirectly purchasing residential property in Canada for a period of two years.
  • Applies to residential property, including detached houses or similar buildings of one to three dwelling units, as well as parts of buildings such as semi-detached houses, condominium units, or other similar premises.
  • Applies to direct or indirect purchases of residential property, including purchases made through corporations, trusts or other legal entities.
  • Establishes penalties for non-compliance applicable to non-Canadians, as well as any person or entity knowingly assisting a non-Canadian in violating the prohibition.

What are some of the key elements covered in the regulations?

Purchase

The regulations broadly define the term purchase to include the direct or indirect acquisition of a right or interest in Residential Property. The regulations then specifically exclude, among other things, acquisitions of interests resulting from transitional or life events such as death, divorce, separation, or a gift.

Application of Prohibition to Non-Canadian corporations and other entities The term Non-Canadian, as it relates to corporations and other entities, has been defined as:

  • an entity not formed pursuant to the laws of Canada or one of its provinces; and
  • an entity formed under Canada’s laws that has direct or indirect ownership by a Non-Canadian of 3% or more of the value of the entity’s equity or voting rights.

Excluded residential properties

Properties located outside of a Census Agglomeration (CA) or Census Metropolitan Area (CMA) are excluded from this prohibition.

Exceptions

Exceptions to the prohibition are permitted for international students, temporary residents, foreign nationals, and refugee claimants, subject to varying conditions, such as tax filing and residency obligations. For further details, please consult the regulations and/or ensure the buyer who may fall into one of these exception groups seeks legal advice on their eligibility.

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