In order to target real estate speculation and address the affordability crisis, the BC provincial government has introduced a new law taxing profits from short-term property sales.
The government introduced the new "home-flipping" tax in its 2024 budget, stating that its aim is to discourage speculators from driving up prices.
Under the proposed new law, the government will implement a "sliding-scale" tax on profits made from properties which are re-sold within 2 years of being purchased.
If a property is re-sold within 1 year of being purchased, profits will be taxed at 20%. The tax rate then gradually reduces to zero for properties which are re-sold between 1 and 2 years following their purchase. For assignment purchases (such as for pre-sale condo and townhome units), the clock will begin to run on the date the assignment contract is entered into. Economists predict that this new flipping tax will lower home sales in BC by nearly 2%, but the ultimate end result remains to be seen.
There will be exemptions for scenarios such as divorce, death, disability, and other life-altering circumstances which force a quick sale of a recently-purchased property.
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