In an effort to crack down on speculators, the B.C. government is introducing a home flipping tax for homes that are sold within two years of purchase.
Starting on Jan. 1, 2025, there will be a new tax implemented on the profit of home sales within two years of buying.
There will be exemptions to the tax for circumstances like divorce, death, illness, relocation for work and others.
The details on how the exemption will be applied for have yet to be determined.
If a home is sold within the first year since purchase, the seller will pay 20 per cent of the profits earned in the tax. In the second year, the tax will be on a sliding scale from 20 per cent diminishing to zero.
The revenue earned from this tax will be applied to building more homes.
Additional exemptions for the tax apply to if you purchase a property and add to the home stock in the province. So if someone were to buy a single-family home and knock it down and build four townhouses, the tax would not apply to any of the homes.
In the first fiscal year between Jan. 1, 2025 and end of March 2025, the tax is expected to bring in $11 million, then in the first full fiscal year of its existence it is expected to bring in $43 million.
Details of how the tax will be applied and how to apply for exemptions will be released in the coming months.
RELATED:
Laura Brougham
