BC Home Flipping Tax

Worked examples

Frequently asked questions

• When did the BC Home Flipping Tax take effect?

  The BC Home Flipping Tax (Residential Property (Short-Term Holding) Profit Tax Act) took effect January 1, 2025. It applies to dispositions on or after that date, including dispositions of properties acquired BEFORE January 1, 2025 if disposed within 730 days. Filing is required within 90 days of the disposition date — late filing carries penalties + interest on top of the underlying tax.

• How is the rate calculated?

  For property held under 365 days: 20% of the taxable income from the sale (i.e., profit). For property held 366–729 days: the rate phases down LINEARLY from 20% toward 0%. For property held 730 days or more: no flipping tax applies. The phase-out is calculated as 20% × ((730 – days held) ÷ 365), so at day 547 (~18 months) the rate is roughly 10%.

• What counts as "profit" for the flipping tax?

  Sale price minus the purchase price minus eligible costs (legal fees, real estate commission, eligible improvement costs). Owner-occupiers may also deduct up to $20,000 if the property was held as their principal residence for at least 365 of the days they owned it. Standard capital gains tax and the federal anti-flipping rule apply IN ADDITION to the BC Flipping Tax — the three taxes stack.

• Are there exemptions?

  Yes. Several life-event exemptions mirror the federal anti-flipping rule's exception list: (1) death of the owner or a related individual; (2) addition to household (e.g., birth, adoption); (3) breakdown of marriage or common-law partnership; (4) threat to personal safety; (5) serious illness or disability; (6) work relocation (≥40 km closer); (7) involuntary employment termination; (8) insolvency; (9) destruction or expropriation of the property; (10) addition of a related individual to the household. Builders and developers also have exemptions for inventory dispositions in the ordinary course of business. Always confirm the specific exemption against the Act and consult a CPA — the audit posture is reportedly tight.

• How does the BC Flipping Tax interact with the federal anti-flipping rule?

  They are SEPARATE taxes that can both apply to the same disposition. The federal rule (effective January 1, 2023) deems a sale of residential property held less than 365 days to be 100%-included business income, with NO Principal Residence Exemption available. The BC tax is a 20% provincial surcharge on profit, phasing out over 730 days. So a property sold 6 months after purchase faces: (a) federal anti-flipping (100%-included business income); (b) BC Flipping Tax (20% of profit); (c) provincial PTT for the new buyer; (d) any HST/GST if newly built. Consult a CPA before disposing within 730 days.

• Does the flipping tax apply if I assign a presale contract?

  Yes. The Act explicitly captures "assignment" of presale contracts as a taxable event when the assignment results in profit and the holding period (running from contract date) is under 730 days. Some assignments are exempt — particularly where the assignee is the original buyer's family member — but the default treatment is taxable. Presale flippers in particular should model this carefully before signing.

• When do I file?

  Within 90 days of the disposition date. The filing is made via a dedicated BC Home Flipping Tax return (not the T1 / federal income tax return — though the federal anti-flipping treatment is reported on T1 separately). Failure to file within 90 days triggers penalties + interest. If you have questions about whether your disposition is taxable, file anyway with a $0 liability declaration — the optionality is one-way: failure to file with a real liability is far worse than filing with no liability.

• I bought before January 1, 2025 — am I subject to the tax?

  Yes if you DISPOSE within 730 days of your acquisition AND the disposition is on or after January 1, 2025. Example: you bought July 1, 2024 and sell July 1, 2026 — that's 730 days, just at the threshold; you are NOT subject. But if you sell June 30, 2026 (729 days), you ARE subject. Acquisition date is what matters for the 730-day clock; disposition date is what matters for whether the Act applies at all.

Related

• · Glossary entry — BC Home Flipping Tax
• · Glossary entry — Federal anti-flipping rule
• · Bill 44 (2023) SSMUH zoning — flipping-tax exposure for builder-flippers
• · BC Property Transfer Tax (full reference)
• · BC closing costs
• · BC Real Estate Codex