BC Gov News

• The home-flipping tax will apply to residential properties resold within two years, starting Jan. 1, 2025.
• Properties purchased in 2023 and 2024 will be subject to the tax if resold after less than 730 days.
• Homes resold within the first year will face a tax rate of 20% of the profit, declining to zero over the next 365 days.
• Revenue from the tax is estimated at $43 million a year and will go back into building homes for people and strengthening housing programs.
• Between 2020 and 2022, an estimated 7% of residential houses were resold within two years, and those properties are often resold at a higher price.
• Individuals selling their primary residence within two years of purchase can exclude a maximum of $20,000 when calculating their taxable income from the property sale, if they use the property as their primary residence during that time and own it for at least a year.

Taxable properties:

• The tax will apply to income earned from the sale of:
  • properties with a housing unit;
  • properties zoned for residential use and have no housing units; and
  • assignment sales - the right to acquire a housing unit or residential property.
• The tax won’t apply on reserve lands, treaty lands and lands of self-governing First Nations.
• Transactions involving mobile homes within residential parks that do not include the sale of the underlying land will not be subject to the tax.

Pre-sales contracts:

• If you enter into a pre-sale contract to purchase a property under development and you buy that property (i.e., you close on the property once it is complete), for the purposes of the two-year window of the tax, you will be considered to have acquired it on the date you entered into the pre-sale contract.
• If a person is assigned a pre-sale contract and then closes on the built property, the acquisition date of the built property is the date they were assigned the contract.
• When you assign a pre-sale contract to another person within two years of entering into the pre-sale contract, you will pay tax on any profit received from the assignment.

Exemptions:

Exemptions for people facing life circumstances:

• Death
• Divorce/separation
• Illness or disability
• Relocation for work
• Change in household membership
• Involuntary job loss
• Personal safety
• Insolvency
• Destruction or expropriation

Exemptions for builders:

• Builders will be eligible for an exemption if a property with one or more housing units is sold and meets one or more of the following criteria:
  • adds a housing unit (e.g., basement suite or garden suite);
  • demolition and building one or more new housing units; and
  • all or substantially all of the house, other than structural components, are removed or replaced, or that the habitable area is doubled in size.
• Exemption for those who undertake certain building activities on a property that was purchased with no housing on it.
• Exemption for those who are in the business of buying and selling property for the purpose of constructing buildings.

Additional exemptions are included in the legislation to consider other unique circumstances, such as someone winning a home from a lottery and then selling it, or selling property to a family member.

The tax does not apply to government entities and property located on reserve or Treaty First Nation lands. 

Other recent housing actions:

The flipping tax is one of many actions B.C. has taken as part of the Homes for People plan. Other actions B.C. has taken to discourage speculation and get more affordable home on the market include:

• Expanding the speculation and vacancy tax to more communities. The tax has helped return more than 20,000 homes to Metro Vancouver area since it was launched in 2018.
• Expanding the First Time Home Buyers program so thousands more people can take the exciting first step into homeownership.
• Increasing the threshold on the newly built home exemption to help families move up the property ladder.
• Establishing the BC Builds program to increase housing options for people with middle income and families.
  • It is anticipated that a minimum of between 8,000 and 10,000 homes for people with middle incomes will be built over the first five years of the program.
• Since 2017, the Province has nearly 78,000 homes that have been delivered or are underway throughout B.C.
• Turning short-term rentals back into long-term homes for people with new short-term rental regulations.
• Introducing a homebuyer protection period so people have time to secure financing and arrange home inspections.
• Launching the Land Owner Transparency Registry, a tool to close tax loopholes, fight tax evasion and help stop money laundering in B.C.’s real estate market.