Heads up, the BC Home Flipping Tax is coming into effect on January 1, 2025.
The BC Home Flipping Tax is part of the Residential Property (Short-Term) Profit Tax Act and applies to income earned from selling or assigning a property within 730 days (two years) of purchasing it. This includes properties bought before January 1, 2025, if they are sold on or after that date and owned for less than two years unless the property is exempt.
The tax is separate from the federal property flipping tax and is calculated independently of federal or provincial income tax systems.
Key Points:
1. Taxable Transactions
The BC Home Flipping Tax generally applies to income earned from the sale of:
• Properties with a housing unit.
• Properties zoned for residential use.
• The right to acquire the above properties, such as the assignment of a purchase contract for a pre-build condo building.
2. Tax Rates and Ownership Periods
• Properties sold within 365 days are subject to a 20 per cent tax on the profit earned.
• The tax rate decreases gradually until the 730-day mark, at which point the tax no longer applies.
3. Exemptions
• Certain exemptions may apply under the BC Home Flipping Tax.
• Exemptions may either apply automatically or require filing a BC Home Flipping Tax return, depending on the specific exemption.
• Sellers must file a return within 90 days of the sale, if they are subject to the tax or if they are claiming exemptions that require filing.
• Details are available here.
Resources:
• BC Home Flipping Tax
• Federal Property Flipping Tax
• Comparing the BC Home Flipping Tax and Federal Property Flipping Tax: What REALTORS® and Their Clients Need to Know