In GMS Flash Alert 2022-213 (December 2, 2022), we reported on the new laws passed in 2022 and the related updates to existing taxes that will potentially impact residential real estate in Canada for individuals relocating to and from Canada.
Regulations that were issued on December 2, 2022 (see GMS Flash Alert 2022-227 December 23, 2022) clarified who is prohibited from purchasing residential real estate in Canada during 2023 and 2024. This law will impact the relocation industry in terms of the two-transaction process1 that is used to expedite the employees’ home sale and facilitate a successful relocation.2 The recent regulations in Canada prohibit foreign-owned Relocation Management Companies (RMCs) and foreign-controlled Canadian subsidiaries from purchasing Canadian homes for relocated employees. This may result in taxable benefits on the reimbursement of home-sale costs because these relocation companies will not be able to execute any two-transaction home-sale programs on Canadian relocations.