BC Home Flipping Tax Affects Non-Residents and Residents
As previously announced in British Columbia’s Homes for People plan, the intention of the tax is to discourage short-term holding of property for profit. The BC Home Flipping tax is subject to legislative approval. Meaning, that all the details have not yet been finalized by the BC Government, so many questions about this tax have no answers.
Note: The BC Home Flipping Tax is separate and distinct from the federal property flipping rules and is not harmonized or administered with the federal or B.C. income tax act.
Effective January 1, 2025
The BC home flipping tax will apply to income from B.C. properties sold on or after January 1, 2025. Income from property purchased before the tax’s effective date may be subject to the new tax if sold on or after January 1, 2025, and within 2 years of purchase unless an exemption applies.
Sliding Scale
In response to my inquiry about this tax, I received an email from the ITB Tax Team DW, BC Ministry of Finance, stating: “The tax rate will be highest for those who own properties for the shortest period and will decline the longer the property is owned. The tax rate will be 20 percent for income earned from properties sold within 365 days of purchase and will decline to zero between 366 and 730 days.”
The tax will apply 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, meaning a pre-sale.
The tax will include special rules for properties, or portions of properties, that have non-residential purposes. The purpose of this tax is to support housing supply, not impede it. Exemptions will be provided for those who add to the housing supply or engage in construction and real estate development.
It is separate and distinct from the federal property flipping rules and is not harmonized or administered with the federal or B.C. income tax.
Tax on Capital Gain
When selling your property The Federal Government’s tax on capital gain is 50% of the profit which is taxed at the marginal tax rate.
Whistler Accountant
For those who decide to buy and flip within 2 years, you must speak with your Whistler accountant to understand how this will affect you. Some exemptions may apply. It is too complex a topic for any real estate agent. In the meantime, please link through to BC home flipping tax – Province of British Columbia (gov.bc.ca) to read more and learn about exemptions. Here is the link to the Federal Government’s website, “Tax effects of buying real estate to sell for a profit”.
Sign Up For BC Government Emails
This is from the BC Government: “We will be updating our website as additional information about the BC home flipping tax becomes available. If the information is not currently available on our webpage, you can subscribe to receive email notifications when we update our website using this link Subscribe for tax updates – Province of British Columbia (gov.bc.ca)“
If you think I would be a good fit to work with you and your family, and you are not already working with a Whistler realtor, please contact me. I look forward to hearing from you.
It’s a Good Life in Whistler!
Marion
Marion Anderson Personal Real Estate Corporation
marion@WhistlerSkiinSkiout.com (604) 938-3885