The new B.C. home flipping tax takes effect January 1, 2025. Yippee!!!! We know you are just as excited for yet another tax as we are! There does seem to be some confusion about the tax and how it will impact home sellers that purchased their primary residence recently. So let's see if we can clear some of the questions up. 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, let's use a purchase date of March 2024.
- The homeowner sells the home on December 24, 2024. No tax would be payable because the tax is not in force yet.
- The homeowner 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. The biggest amount of tax (in most cases 30%) seems to be in the first year, where the full 30% is payable. After that it's a sliding scale.
- The homeowner sells the home in April 2026. No tax is payable because this is outside the two-year window. In other words, you are free to sell without the added flipping tax AFTER 2 years have passed.
- The home purchased in March 2024 was a pre-sale. The purchaser is set to move in December 2026. If the original purchaser assigns their contract to another buyer before March 2026, there will be tax payable as the contract was entered into in March 2024.
- The home purchase is a pre-sale and the contract was entered into in February 2021. The contract is assigned to a new Buyer on December 2024, no flipping tax is payable as this is outside the 2 year window. Even if the home has not yet completed / is not yet ready for occupancy.
