BC Implements New Home Flipping Tax Effective January 1, 2025
Starting January 1, 2025, the BC home flipping tax will impact income generated from the sale of properties within British Columbia. Properties purchased before this date may still fall under the scope of the tax if sold within 2 years, unless certain exemptions are met.
Initially outlined in British Columbia’s Homes For People plan, the primary aim of this tax is to discourage the short-term holding of properties for profit.
Here's how the tax will operate:
The tax will be applicable to income derived from the sale of properties owned for less than 2 years.
The tax rate will vary, with the highest rate imposed on properties held for the shortest durations. It will start at 20 percent for properties sold within 365 days of purchase and diminish to zero between 366 and 730 days.
Exemptions may be available for those eligible.
Who will be affected:
If you sell your property on or after January 1, 2025, income from the sale may fall under the new tax if the property was acquired less than 2 years prior.
Whether the tax applies depends on the purchase date of the property.
Examples:
If you bought a property on May 1, 2023, and sold it on January 31, 2025, the income from the sale would be taxable.
However, if you opt to sell the property after June 1, 2025, the income wouldn't be subject to the tax.
Note: The seller's residency status may vary.
Exemptions:
Certain life circumstances, such as separation, death, illness, work relocation, involuntary job loss, change in household status, personal safety, or insolvency, may qualify for exemptions.
Selling your primary residence within 2 years of purchase might allow you to exclude up to $20,000 from taxable income.
Exemptions will also be available for those contributing to housing supply or engaging in construction and real estate development.
It's important to note that this overview doesn't encompass all potential exemptions, and further details will be provided in due course.
Applicable properties:
The tax pertains to income earned from the sale of properties with housing units, those zoned for residential purposes, or the rights to acquire such properties (e.g., contract assignments).
Special provisions will apply to properties or parts thereof used for non-residential purposes.
Notably, income from the sale of properties situated on reserve lands, treaty lands, and lands of self-governing Indigenous Nations won't be subject to this tax.
Curious to know how the market’s doing in your neighbourhood? Email me and I’ll prepare a quick customized report for you! It’s my pleasure!
Jez Nichols
CIR Realty Shuswap
Salmon Arm BC
Message me: 250-515-5391
Send me an email: jeznichols@gmail.com
