Canadian Real Estate Tax Changes
In January, the Canadian government implemented new legislation called the "Prohibition on the Purchase of Residential Property by Non-Canadians Act." This law targets foreign nationals and corporations owning residential property in Canada, aiming to combat rising house prices. There are two key implications of this new legislation for the global mobility space:
1. Foreign buyers will be unable to purchase residential property in Canada for a period of two years. This restriction may impact global mobility professionals' ability to attract and retain talent if foreign employees cannot purchase property in the country.
2. The "Underused Housing Tax Act" requires certain non-Canadian owners (and some Canadian owners) of residential property in Canada to file an annual tax return reporting their ownership. Unless certain exemptions apply, a 1% tax on the property's value is levied.
Exemptions and Filing Obligations
Thankfully, several exemptions are available for affected property owners. If you are a Canadian citizen or hold a Canadian permanent residency card, you are considered an "excluded owner" and do not need to take any further action. However, if you are a non-Canadian citizen or do not hold a permanent residency card, you are considered an "affected owner"
Watch the complete tax update here:
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Created on 17-3-2023