Starting January 1, 2025, BC introduced a home flipping tax targeting properties sold within 730 days of purchase. This tax applies to residential properties, including pre-sale contracts, with a 20% rate for properties sold within the first year, decreasing in the second year. Exemptions may apply, but sellers must file a return within 90 days of the sale, regardless of eligibility. The tax applies to both B.C. residents and international sellers.
Who is Subject to the Tax?
The tax applies if the property was purchased within 730 days before selling. For example, if a property was bought on May 1, 2023, and sold on January 31, 2025, the profit is taxable. If sold after 730 days, no tax applies. Properties such as housing units or those zoned for residential use, and presale contracts, are considered taxable properties.
Exemptions and Deductions
Certain exemptions may apply, such as selling a primary residence for more than 365 consecutive days. In such cases, a deduction of up to $20,000 may be claimed. The tax calculation includes the net taxable income from the sale, and days of ownership are counted from purchase to sale date. Properties sold after 729 days are exempt, but sellers must understand the rules, including those for related person transactions and presale contracts.