Do I pay tax if I sell my house in Ontario less than a year after buying it?
Yes, in many cases you do. If you sell a home owned for fewer than 365 consecutive days, the flipping rule treats the profit as business income, and the principal residence exemption is not available. It applies to sales on or after January 1, 2023.
A loss does not help: it is deemed to be nil. A normal sale is different: the capital gain is proceeds minus the adjusted cost base and selling costs, reported on Schedule 3, and half is taxable for 2025. A principal residence is designated on Form T2091(IND).
The rule does not apply if the sale is due to, or made in anticipation of, death, a related person joining your household, serious illness or disability, involuntary job loss, an eligible relocation, insolvency, or a threat to personal safety. It also does not apply if the sale is due to a marriage or common-law breakdown and you lived apart for at least 90 days before the sale. These exceptions have detailed definitions and are applied case by case, so a lawyer can confirm how they fit your situation.
Key takeaways
- A housing unit in Canada owned for less than 365 consecutive days and sold on or after January 1, 2023 is a flipped property, so the profit is business income and the principal residence exemption is not available.
- A loss on a flipped property is deemed to be nil, so it gives you no loss to claim.
- The rule does not apply to sales due to, or made in anticipation of, listed life events such as death, serious illness or disability, involuntary job loss, insolvency, or a threat to personal safety.
- A sale caused by the breakdown of a marriage or common-law partnership is also excepted if you lived separate and apart from your partner for at least 90 days before the sale.