On January 1st, 2025, the new home flipping tax took place. This new tax will have an impact on those who purchase properties to fix up and sell quickly. This tax applies to the profits made off of a property if you have owned it for less than 730 days. 

How much is the tax?

The tax rate is 20 percent of net taxable income earned from a property sold within 365 days, and the rate decreases over the next 365 days. At 730 days, the tax no longer applies.

Why did this get put in place?

It is intended to discourage short-term holding of property for profit as part of the Homes for People Plan.

What if I buy a pre-sale?

Pre-sale contracts may be subject to the tax if sold after owning for less than 730 days, unless an exemption applies. For more information on exemptions, here is a link: https://www2.gov.bc.ca/gov/content/taxes/income-taxes/bc-home-flipping-tax/exemptions

Keep in mind that the BC home flipping tax is separate from the Federal property flipping rules.

If you have detailed questions regarding the home flipping tax, check the FAQs on the government website or seek independent professional advice.

When writing an offer on a home, house insurance is a standard subject that takes about three to ten days to fulfill. You must be able to insure a home in order to get financing. If you cannot get house insurance, you most likely will not be able to secure a mortgage. 

How do you fulfill a house insurance subject?

There are a couple ways to get insurance figured out. One way is for your Real Estate Agent to ask the listing agent if the Sellers can lift their privacy on their insurance policy. This is the fastest and most convenient way to get a quote and ensure that the house is insurable. The other option is to call around to different insurance agencies to find the best quote. Some companies have online forms you have to fill out with information regarding the home. The amount of questions an insurance company will ask you about the home is extensive. Having an inspection on the home prior to inquiring with insurance companies is the best way to get all the information you may need to fill out the questionnaire. Once you have received a quote from an insurance agency and are satisfied with the pricing, you can now remove your insurance subject.

What if there are issues with the home?

If there are any problems with the home that an insurance company may not approve of, they will give you a timeline to fix or replace the items of concern. For example, if the roof is over 25 years old, they may give you three months after completion to get it replaced. Homes with poly-b piping may not be insurable through all companies. You will have to search around for a company that will insure a home with poly-b and even then they may require a re-pipe within a certain period of time or they will not cover you for any water damage.

Insurance companies may request to see the inspection report. You do not have to provide this, I have been told by inspectors that you should not provide your insurance company with your inspection report. The reasoning behind this is that inspection reports bring up every small or large issue of a home. When an insurance company looks at how many issues there are, they could rack up your insurance rate. Don’t hesitate to reach out to your real estate agent if you have any further questions!

   Have you ever wondered how your real estate agent determines what the value of your property is? Accurately evaluating your property is beneficial to both Sellers and Buyers. Here are the methods used by real estate agents when determining market value.

   The most important tool that a REALTOR® uses when evaluating your property is the analyzing of recently solds, active listings, and expired properties that are comparable to yours. They put this data together in a CMA (comparative market analysis). Your Realtor will take a look at what a comparative property was listed for versus what it sold for and how long it took to sell. It’s also important that they look at different neighbourhoods as they can have an impact on the pricing. 

   Property specific factors also play a big role in determining the value of a property. For example, a home with an ocean view and pool will have more value compared to a home with a hot tub and mountain view. Other factors include size of property, age of home, condition, recent upgrades, zoning, neighbourhood amenities, and curb appeal.

   Real estate agents face challenges when determining market value. One of the toughest challenges is having a great comparable property but it’s drastically over-priced. Some prices are not great reflections on the market and these higher priced homes are sometimes seller driven. Another challenge that can arise when evaluating a home is that the home may be unique and there are a lack of comparables. This makes doing a CMA tricky and lacks data.

   Determining market value of a property is a complex process that requires both expertise and local knowledge. Realtors use a variety of tools and methods for analyzing comparable solds and active listings. Whether you’re selling a home with an ocean view or a mountain view, working with a knowledgeable realtor who understands the intricacies of market value assessment is key to achieving the best possible outcome in your real estate journey.

  Meeting with a Realtor one year before you plan to move seems a bit far in advance, right? Here’s why it is the perfect time to meet with a Realtor. If you want the best value for your home, you want to eliminate or fix anything that will decrease the value. You don’t want any financial surprises the week before you list your house for sale. For example, if your roof is 30 years old, it would be a good idea to replace it. This is a big-ticket item that buyer’s will use to negotiate price. Replacing a roof isn’t a quick or cheap job. Having one year to get it done gives you less financial stress and time to figure out what type of roof you want and which company to hire.

   Getting an accurate evaluation requires your Realtor to come to your home and take a look at any upgrades you have done. Knowing ahead of time what the value of your property is helps plan for what price range of home you will be looking for. If you think that you can get a million dollars for your place but realistically a Realtor tells you that it will sell for $849,000, it’s better to know now than fall in love with a house you actually can’t afford.

Meet with me today to get a free home evaluation! 604-344-0055

   2024 had a strong start, January and February had more sales this year compared to January and February in 2023. However, March was slower this year than last.

   There were a total of 61 sales in Powell River (including Texada and Savary) during the first quarter of 2023 and there was an average selling price of $592,950. In the first quarter of 2024, there were 72 sales with an average selling price of $563,161. The average selling price is down but not by much. 

   It took an average of 80 days on market for a property to sell last year in the first quarter. This year, it took an average of 72 days. 

   Additionally, the government announced a new home flipping tax policy that will come into place at the start of 2025. The tax will apply to the sale of homes held by the owner for less than 2 years. The tax rate will be 20% for properties sold within the first year of purchase and over the second year, the rate will gradually decline to 0%.