The BC Government has announced a new market intervention measure whichthey hope will assist with housing supply.

The government is proposing to add a tax to the proceeds of the sale if thehome is sold within two years of purchasing.

The government believes flippers are harming an overheated market.The tax is supposed to take effect January 1, 2025.

The tax will apply to income earned from the sale of relevant properties, including:

  • Properties with a housing unit
  • Properties zoned for residential use
  • The right to acquire the above properties, such as the assignment of a purchase for a pre-build condo building.

The tax will not apply to exempt property locations such as treaty or reserve lands.

There are some exemptions for life circumstances such as:

  • Death of a related individual,
  • Serious illness or disability,
  • Eligible relocation
  • Change in household membership.

You will still have to file a BC home flipping tax return,but may not have to pay the BC home flipping tax ifyou experience any of the following life circumstances and they are considered to lead to the sale of aproperty.

The BC Real Estate Association economists have studied this issue and distinguish between speculators,who are investors attracted to mere profit and real home sellers who invest their capital, time and labour toimprove the housing supply.

BCREA is concerned about unintended consequences which often follow market interventions.Our economists estimate that the flipping tax will lower sales in BC by 1.7%, but will have minimal impact onhome prices. As we all know, supply and demand are the two key factors that affect home prices.

Additionally, market insiders are concerned about the risk that the tax will cause potential sellers to delaylisting their homes. This often leads to lower resale housing supply and tighter market conditions.As market conditions tighten, we find ourselves again having too many buyers competing for too fewhomes which tends to drive up prices.

Industry experts know that flipping activity is an insignificant share of overall transactions in BC and areconcerned that this tax will apply to properties purchase BEFORE the effective date (January 1, 2025)if owned for less than 730 days unless an exemption applies.

The BCREA will continue to advocate for increased housing supply and sound policies which we know willcombat our housing crisis and make housing more affordable and accessible.

BCREA is the voice of BC’s REALTORS®. In collaboration with the province’s eight real estate boards, theywork with all levels of government to advocate for public policy that provides housing opportunities, en-sures economic vitality, protects property owners, preserves the environment, and builds better communities.

Click here for more information:BCREA Analyzing the Impacts and Consequences of the Provincial Flipping Tax