B.C. home-flipping tax starts Jan. 1, 2025

If you’ve owned a home in B.C. for less than two years and are now looking to sell it, your profit from the sale may be subject to a new provincial tax beginning Jan. 1.

The Residential Property (Short-Term Holding) Profit Tax Act — also referred to as the home-flipping tax, will take effect in B.C. at the turn of the New Year.

This means if you bought a property as early as May 2023, you may be subject to the fee.

The province first introduced the idea of the tax in 2022. The legislation, outlined in the BC NDP’s pre-election budget in February of this year, aims to “discourage investors from buying housing only to turn a quick profit.”

The government has explained that, under these proposed rules, homes sold within the first year of being purchased will face a tax rate of 20 per cent of the profit, declining to zero per cent over the second year.

Approximately seven per cent of homes sold in B.C. between 2020 and 2022 were resold within two years, the government noted in February.

“Buying a home is one of the biggest milestones in people’s lives – whether it is their first apartment or sizing up for a growing family – everyone wants to find a place to call home and build a good life,” then minister of finance Katrine Conroy said in April when the Legislation was tabled. “We don’t think families should have to compete against wealthy speculators when they are purchasing a home, which is why we’re taking action against investors who use the housing market as a stock market.”

Some people have criticized the tax and questioned whether it will actually have the desired effect. In response, Conroy said Wednesday the flipping tax is just “one of the tools in our toolbox.”

“It’s one more tool to say that we need to lower the prices, and speculators actually increase the prices of housing in the province,” she explained, adding B.C.’s flipping tax will complement the federal one.

Certain exemptions to the tax do apply, including for “unavoidable life changes,” such as divorce, illness, death, and relocation for work.

The province says builders may also be exempt from the tax, if what they are doing is “adding to the housing supply, including building housing on residential property with no existing housing, or adding an additional suite or housing unit to a property that has an existing home.”

With files from Angelyna Mintz.