The Home Flipping Tax and What it Means For You

The Home Flipping Tax and What it Means For You

The Home Flipping Tax and What it Means For You

6 May 2024

The new B.C. home flipping tax takes effect January 1, 2025. Are you confused about what the tax means and how to advise your clients? We can help. 

The most important thing to know is that you will need to inform your clients about the tax if they ask questions about selling a recent purchase. The BC home flipping tax webpage is your best source of information, and you can subscribe to the page to be notified about updates. 

Here are some scenarios for the tax that may help. Remember, the tax comes into force on January 1, 2025, and applies for two years after a property is purchased. 

In all scenarios, the client buys a home in March 2024. 

  1. The client sells the home on December 24, 2024. No tax would be payable because the tax is not in force yet.
  2. The client sells the home on February 3, 2025. Tax is payable in this scenario, depending on the amount of profit and the timing. The faster the house is flipped, the higher the tax is. 
  3. The client sells the home in April 2026. No tax is payable because this is outside the two-year window.
  4. The home purchased in March 2024 was a pre-sale. The client is set to move in December 2026. If the client assigns their contract to another buyer before March 2026, there will be tax payable as the contract was entered into in March 2024. 

Though the tax doesn’t come into effect until 2025, licensees will need to explain the implications of the tax to their clients if they plan to sell a recent purchase within that two-year window. 

However, there are exemptions to the tax, and licensees and clients should check the Government of B.C. website for full information. For detailed questions about the application of the tax to a specific transaction, you should advise your client to seek independent professional advice.

Source of Information: The Home Flipping Tax and What it Means For You

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