Advisory

Purpose

This advisory is to inform real estate licensees of the new BC home flipping tax.

Background

On January 1, 2025, the BC home flipping tax came into effect. This tax applies to profit earned from selling a property in British Columbia, including pre-sale contracts, if the property was owned for less than 730 days.

Key Information About the Tax

• The tax is separate from federal property flipping rules and is not harmonized or administered with federal or B.C. income tax. It is also separate and distinct from the property transfer tax.
• The seller may be a B.C. resident or a resident anywhere else in the world.
• The tax applies to properties with a housing unit, properties zoned for residential use, or the right to acquire the above properties, such as the assignment of a purchase contract for a pre-sale development unit.
• The tax does not apply to exempt property locations or the leasing or sale of a leasehold interest in a property.
• The BC home flipping tax return is separate and distinct from annual income tax filings. A return must be filed within 90 days of the sale if the tax applies, or if an exemption requires a return to be filed.
• Exemptions are available, and depending on the exemption, the seller is either:
  • Exempt only after filing a return, or
  • Exempt without filing a return.

To learn more about the home flipping tax, please refer to the links provided in the Additional Information section of this Advisory.

Licensee Considerations

Licensees should familiarize themselves with the Residential Property (Short-Term Holding) Profit Tax Act, so they can alert clients who may be considering selling a recently purchased property within the two-year window to the potential application of the tax. As per the Real Estate Services Rules, it’s essential to stay within your area of expertise. For detailed questions about the application of the tax to a specific transaction, you should advise your client to seek independent professional advice. The BC home flipping tax webpage is the best source for information on the tax. Licensees should review the webpage and can subscribe to the page for updates.

Additional information

To learn more please refer to:

• BC home flipping tax — Province of British Columbia
• Bill 15 – 2024: Budget Measures Implementation (Residential Property (Short-Term Holding) Profit Tax) Act, 2024