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.
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