By Jennifer Lynch, VP, Professional Services

If you're working with buyers considering purchasing a property for the short-term or sellers looking to sell within the first 730 days of ownership, there's an important new tax you need to know about. Starting January 1, 2025, the BC Home Flipping Tax will apply to certain property transactions, and as a REALTOR®, it's important to understand how it could impact your clients' decisions. Here's a quick breakdown of what you need to know. 

The BC Home Flipping Tax applies to income from selling or assigning a property within the first two years (730 days) of ownership. This includes properties bought before January 1, 2025, if they are sold on or after that date and owned for less than two years, unless the property is exempt. 

This new tax is separate from the federal property flipping tax and is calculated independently of federal or provincial income tax systems. 

Overview of Key Points for REALTORS®

1. Taxable Transactions 
The BC Home Flipping Tax generally applies to income earned from the sale of:  

• Properties with a housing unit. Properties zoned for residential use. 

• The right to acquire the above properties, such as the assignment of a purchase contract for a pre-build condo building 

2. Tax Rates and Ownership Periods 

• Properties sold within 365 days are subject to a 20 per cent tax on the profit earned. 

• The tax rate decreases gradually until the 730-day mark, at which point the tax no longer applies. 

3. Exemptions 

• Certain exemptions may apply under the BC Home Flipping Tax.  

• Exemptions may either apply automatically or require filing a BC Home Flipping Tax return, depending on the specific exemption. 

• Sellers must file a return within 90 days of the sale, if they are subject to the tax or if they are claiming exemptions that require filing. 

• Details are available here. 

How REALTORS® Can Support Clients 

REALTORS® play an important role in raising awareness and empowering clients to make informed decisions. Here are some ways REALTORS® can effectively support consumers: 

• Be aware of the BC Home Flipping Tax and its potential impact on transactions. 

• If clients are considering purchasing a property for short-term holding or selling a property within two years of purchase, encourage them to consult with a tax professional. This will help them understand how applicable taxes may affect their specific transaction. 

• Provide links to official resources, such as the BC Home Flipping Tax page on the BC Government website for accurate and up-to-date information. 

Staying Proactive in Your Role 

The introduction of the BC Home Flipping Tax highlights the importance of staying informed about regulatory changes and the potential impacts on clients. 

While REALTORS® should not provide tax or legal advice, they can direct clients to official BC Government resources for up-to-date information here. To help clients fully understand their obligations and explore any potential exemptions, REALTORS® should also recommend consulting qualified tax and legal professionals.

By keeping up to date on regulations, REALTORS® add significant value by equipping clients with the knowledge and resources they need to navigate complex real estate matters and achieve their goals.