29 Feb BC government unveils details of its proposed home-flipping tax

Steve Huebl·Mortgage Industry News·February 26, 2024

The British Columbia government today unveiled additional details of its proposed house flipping tax that was first introduced in last week’s budget.

The government said it plans to introduce the legislation in the spring. If passed, the new tax will take effect starting January 1, 2025.

The legislation would impose a tax on any home sold within two years from its purchase date, but includes exemptions for people facing “unavoidable life changes,” including death, divorce and job relocation or loss.

According to government figures, 7% of homes bought between 2020 and 2022 were resold within two years.

Homes sold within the first year that don’t fall under any of the exemptions would face a tax of 20% on the profits, with that rate falling progressively to zero over the second year.

“We know that people are struggling to find homes to rent or buy in areas that are close to work and their families,” Minister of Finance Katrine Conroy said in a statement. “That’s why Budget 2024 takes further steps to deliver more housing for people faster and make sure homes are lived in.”

The proposed new tax accompanies other measures introduced in last week’s budget, including:

Expansion of the First Time Homebuyers’ Program: First-time buyers of homes valued up to $835,000 will benefit from a property transfer tax exemption on the first $500,000 of their purchase price, with potential savings reaching $8,000. The government said this new exemption will benefit approximately 14,500 people, or about twice as many under previous exemptions.
Newly built home exemption: To encourage the purchase of new constructions, buyers of homes valued up to $1.1 million will benefit from the newly-built home exemption. This is an increase from the current $750,000 limit.
Rental home construction exemption: To lower the cost and encourage the construction of more rental units, eligible purpose-built rental buildings of four or more units will also receive a property transfer tax exemption that will run from January 1, 2025, until 2030.

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