Effective January 1, 2025, British Columbia introduced the BC Home Flipping Tax to curb short-term speculative real estate sales. This tax applies to profits from residential properties sold within 730 days of purchase, with rates decreasing based on the length of ownership.

Key Details:

  • Ownership under 365 days: 20% tax on net taxable income.
  • Ownership between 366-729 days: Incrementally decreasing tax rates.
  • Ownership over 730 days: No tax.

Exemptions:

Certain circumstances may exempt sellers, including life events (death, illness, divorce), sales within a business, or transfers to family members. Some exemptions require filing a tax return. For the most accurate information, consult your accountant and lawyer before entering the purchase and sale agreement.

Filing Requirements:

A BC Home Flipping Tax return must be filed within 90 days of sale for properties owned under 730 days unless fully exempt. Non-compliance can lead to penalties.

What This Means for Buyers and Sellers

This tax can significantly impact real estate strategies, including presale contracts and assignments. To understand how it affects your unique situation, consult with your lawyer and accountant.

Planning to Buy or Refinance?

If you’re considering purchasing or refinancing a property, having the right mortgage strategy is crucial. Contact me today for expert guidance tailored to your goals. Let’s work together to secure the financing you need to make your real estate dreams a reality.

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