BC Home Flipping Tax Now in Effect
As of January 1, 2025, the BC Home Flipping Tax is now in effect. This new tax is distinct from the existing federal property flipping tax and specifically targets short-term property sales within British Columbia.
- The tax applies to income from sales of residential properties, presale contracts, or assignments owned for less than 730 days (two years). This includes properties bought before January 1, 2025, if they are sold on or after that date and owned for less than two years.
- The rate is 20 per cent for sales within the first 365 days of ownership, gradually decreasing until it is eliminated at 730 days.
- This tax applies to any person or entity (individual, corporation, partnership, or trust) selling property within BC, regardless of residency.
- Exemptions include certain primary residences, though exemptions are subject to specific conditions and filing requirements.
The BC Government has released a new video about the tax here >>
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.
The federal property flipping tax rule, in effect since January 2023, applies to gains from the sale of a property owned for less than 365 consecutive days. Under this rule:
- Gains are treated as business income rather than capital gains, resulting in full taxation at the individual’s tax rate.
- Principal residence exemption generally does not apply if the property is flipped, meaning it is no longer automatically tax-exempt if sold within the short period.
- Certain life events exempt property sales from this rule.
For the BC Real Estate Association’s breakdown of the new tax, including a comparison with the federal flipping tax, click here.