Understanding the New BC Home Flipping Tax: What You Need to Know

by Patricia Jones

Starting January 1, 2025, the BC Home Flipping Tax is officially in effect. This tax targets profits made from selling a property owned for less than two years (730 days). Its primary aim is to discourage speculative flipping that drives up housing prices, while also making more homes available for long-term residents. By addressing these issues, the tax is intended to improve affordability, curb rapid price increases, and stabilize BC's real estate market.

Below is a concise overview of how the tax works. For full details, we recommend visiting the official BC government page on the Home Flipping Tax.

Who Is Impacted by the Tax?

The BC Home Flipping Tax applies to:

Individuals and entities selling residential properties in BC, regardless of their residency status.
Both freehold properties and pre-sale assignments (contracts for properties not yet built).
Sales finalized on or after January 1, 2025, even if the property was purchased before this date.

Ownership Duration and Tax Rates

The tax is based on how long you’ve owned the property:

Owned for less than 365 days: The maximum tax rate of 20% applies to the profit from the sale.
Owned between 366–729 days: The tax rate decreases proportionally the longer the property is held, reaching 0% after two full years.

Exemptions

While the tax is designed to discourage short-term flipping, several exemptions exist to account for life events or unavoidable circumstances.

Personal Circumstances

Death: Sale of the property by an estate or surviving heirs.
Divorce or Separation: Selling due to the breakdown of a marriage or common-law relationship.
Health or Disability Needs: Sales necessitated by significant health or mobility challenges.
Job Relocation: Required sale due to a job move beyond a specified distance.
Household Changes: Events like the birth of a child or caregiving responsibilities.
Job Loss: Financial hardship caused by involuntary unemployment.
Safety Concerns: Sales required for personal safety, such as domestic violence situations.

External Factors

Bankruptcy or Insolvency: When financial obligations cannot be met.
Property Damage: Sales following destruction caused by natural disasters or accidents.
Expropriation: When a government or public body acquires the property.

Developer and Builder Exemptions

Builders or developers may qualify for exemptions, provided specific conditions are met.

Note: Some exemptions require filing a tax return, while others are automatically applied. Visit the BC government website for a full list of exemptions and filing instructions.

How the Tax Is Calculated

The tax is applied to the profit made on the property sale, calculated as follows:

Determine Taxable Income:
Sale Price – (Purchase Price + Documented Improvements + Eligible Sale Costs)
Primary Residence Deduction:
If the property was your primary residence for at least one year, you may deduct up to $20,000 from the taxable profit.
Apply Tax Rate:
- Properties owned for less than 365 days: Full 20% tax rate applies.
- Properties owned between 366–729 days: The rate decreases gradually the longer the property is owned.

How It Differs from the Federal Property Flipping Tax

It’s important to note that the BC Home Flipping Tax is a provincial initiative separate from the Federal Property Flipping Tax. The two taxes target similar practices but have distinct scopes and requirements.

What Should You Do Next?

This new tax could significantly impact property sales and investment strategies. To understand how it might affect your specific situation, we recommend consulting your local Whistler Real Estate Company agent or personal accountant. Their expertise can help you navigate these changes and make informed decisions tailored to your goals.

Disclaimer: This information is current as of January 13, 2025. For the most accurate and updated details, please visit the official BC government Home Flipping Tax page.