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Are you aware that there is a home flipping tax coming into effect on January 1st 2025? What does this mean for you you ask?
Here is the long and short of it.
In all scenarios, the client buys a home in March 2024.
- The client sells the home on December 24, 2024. No tax would be payable because the tax is not in force yet.
- The client sells the home on February 3, 2025. Tax is payable in this scenario, depending on the amount of profit and the timing. The faster the house is flipped, the higher the tax is.
- The client sells the home in April 2026. No tax is payable because this is outside the two-year window.
- The home purchased in March 2024 was a pre-sale. The client is set to move in December 2026. If the client assigns their contract to another buyer before March 2026, there will be tax payable as the contract was entered into in March 2024
(All scenarios courtesy of the BCFSA website.)
Although there is exceptions, the basic structure of this tax is, if you purchase a home and then sell said home within two years of your purchase you will be taxed on the income produced from said sale.
For more information check out the link below:
