New year brings new changes and challenges for B.C. real estate

But for the Vancouver real estate market, this new year in particular also brings with it a bounty of new provincial and federal policies, programs and tax changes that could impact both REALTORS®, and anyone looking to buy or sell a home in B.C.

In fact, there are so many new changes and challenges in store for 2025, it can be hard to keep track of them all! So to save you a little time, here’s a quick overview of what all those new changes are, how you can find out more about them – and what they might mean for you.

Short-term rentals

On January 20, 2025, the B.C. government also launched its new registry for short-term rentals. Starting May 1^st, anyone who lists a short-term rental on platforms like Airbnb or Vrbo will need to apply for, and display, a registration number on all their online listings.

The goal of the registry is to free up more units that are currently being used as short-term rentals, for the larger long-term rental or homeownership pools. Opponents of the move, however, say it will only make the lack of available hotel rooms in busy tourist destinations like Vancouver even worse, while also penalizing homeowners and small property investors.

The registration fee will cost between $100 to $450 depending on whether or not you live in the property you’re renting out, or up to $600 for the operators of so-called “strata hotels.” Any hosts who don’t include their registration number will have their listings taken down.

The registry is also part of the province’s broader efforts to return more short-term rentals to the long-term market, which includes the launch of the provincial government’s Homes for People Action Plan and the passage of the B.C. Short-Term Rental Accommodations Act (STRAA) last May. For a quick look at the implications of the STRAA for REALTORS®, and what their new responsibilities are to make sure the Act is being followed, take a look at this handy overview from the British Columbia Real Estate Association (BCREA).

Amendments to B.C.’s Residential Tenancy Act

In a bid to put an end to bad-faith evictions and unfair rent hikes, the B.C. government passed several amendments to the Residential Tenancy Act (RTA) and the Manufactured Home Park Tenancy Act in May of last year.  Among other measures, the amendments:

• require landlords to use an online government portal to generate eviction notices;

• give landlords greater flexibility in ending problematic tenancies;

• increase the amount of notice a landlord has to give when ending a lease for personal occupancy, and doubles the amount of time they have to live in the unit afterwards from six to 12 months;

• restrict landlords from increasing rents above their annual allowable amount if a tenant adds a child under the age of 19 to their household (even if the lease says that the rent will be higher if there are more occupants in the unit);

• increase the amount of time renters have to dispute a notice to end their tenancy from 15 to 30 days;

• prohibit evictions for personal use in purpose-built rental buildings with five or more units, and evictions to convert rental units to certain non-residential uses; and

• create a more streamlined process to help landlords and tenants resolve disputes.

To learn more about each of these changes, check out the province’s news release or take a look at this insightful summary of the amendments from the BCREA. In addition, on January 22, 2025, BCREA updated the Tenant Occupied Property – Buyer's Notice to Seller for Vacant Possession form on its website to provide clearer guidance to buyers, sellers and REALTORS® about the impact of the amendments on any requests for vacant possession.

Provincial and federal anti-flipping taxes

On January 1, 2025, the B.C. government’s “Anti-Flipping Tax” officially came into effect across the province. The new measure adds a 20 per cent tax on the profits from any property that’s sold in B.C. less than a year after it was purchased, and a 10 per cent tax for anyone who sells a home less than 18 months after they bought it. The goal of the tax is to try to prevent speculation and so-called “house flipping” in the B.C. housing market. But opponents of the tax say it will have an unfair effect on people who are forced to sell their home sooner than expected because of unforeseen life events, like having a child, getting divorced, losing their job or starting a new career in another city. The B.C. anti-flipping tax is separate from, and in addition to, the federal anti-flipping tax, which was implemented in January 2023. The federal measure changed the tax classification on the profits from any property that’s sold less than a year after it was bought from capital gains to being treated as business income. This effectively shifted the amount of the profit that’s eligible to be taxed from 50 per cent to 100 per cent of the profits. BCREA has published a practical guide to compare the two taxes.

Impacts of a federal election on Canada’s housing policies and programs

Of course, the big news this year is that it seems all-but certain Canadians will soon be heading back to the polls for a new federal election. Depending on who wins and what the results are, this could have a big impact on the real estate market. The Conservatives, for example, have vowed to cancel or change many of the housing policies implemented by the current government if they win, including cutting the Housing Accelerator Fund and Housing Infrastructure Fund. They’ve also pledged to introduce new measures of their own, such as cutting the G.S.T. on new homes that sell for less than $1 million. But because of the resignation of Prime Minister Trudeau and the current Liberal leadership race, even if the Liberals win, there could be significant changes in store for several of Canada’s current housing policies and programs. Only time will tell, but it’s safe to say the next election (if or when it comes) will be well worth watching by anyone interested in real estate in B.C.

How Trump’s tariffs could affect B.C. real estate

The OTHER big news of late is the potential impact on Canadian real estate of the 25 per cent tariffs that newly-elected U.S. President Donald Trump has threatened to impose on most of Canada’s exports to the United States, possibly as early as February 1st. When everything was just speculation at one point, industry experts have said that if the tariffs are implemented, they could lead to higher costs for building materials and higher prices for new homes. They could also have a serious impact on Canada’s economy and our job numbers – both of which would likely reduce the demand for housing by making it harder for would-be homeowners to afford to buy a home. In addition, in part because of the prospect of a trade war with our largest trading partner, most forecasters expect the Canadian loonie will continue to be weak for at least the rest of the year. A weaker loonie would be bad news for builders and new home buyers, as it can drive up the cost of materials and financing, and increase purchase prices for new construction. On the plus side, a weak Canadian dollar could also potentially encourage more foreign investment in Canada – including in real estate in attractive markets like the Lower Mainland.

Capital gains tax changes in limbo

Finally, on September 23, 2024, the federal government tabled a Notice of Ways and Means Motion to amend the Income Tax Act, and increase the tax inclusion rate on capital gains in excess of $250,000 a year from 50 per cent to 66.7 per cent. Essentially, if this bill is passed, it would significantly increase the amount of tax that individuals, small business owners and trusts have to pay if they earn more than a quarter million dollars a year in capital gains or when they sell an asset – like stock shares, or a second home or investment property. But because Parliament was prorogued before the bill could be introduced, all those changes are “on hold” until either Parliament reconvenes after the current Liberal leadership contest is over, or (more likely) after the next federal election. As of right now, however, Revenue Canada is still treating the new, higher capital gains inclusion rate as its official policy. This means that businesses and individuals need to follow the new rules when filing their 2025 taxes even though the bill was never officially passed, and in spite of the fact that the changes might be cancelled outright before they ever become the law of the land. Until then, thousands of small business owners (including most REALTORS®), home buyers and sellers, and investors are all basically in limbo, and the impact of those potential changes on the real estate market will remain an open question for at least another tax year or longer.

Questions?

‍Contact us if you have questions about any of these new measures, need some objective advice on how you can plan for them, or just want to find out more about how (or if) they impact you.