BC Home Flipping Tax: What It Is and Who Has to Pay

If you bought a home, condo or presale contract and resold it fairly quickly, you may be wondering whether British Columbia's home flipping tax applies to you. The answer depends on how long you held the property, what kind of property it was and why you sold.

This article explains in plain terms what the tax is, who can be liable, how it is calculated, the main exemptions, and what happens if you miss the filing deadline. It is general information, and a lawyer or accountant can confirm how it applies to your facts.

This article covers the law of British Columbia.

What the tax is and when it applies

The BC home flipping tax is imposed under the Residential Property (Short-Term Holding) Profit Tax Act and took effect January 1, 2025. It applies to net taxable income from disposing of a taxable property owned for less than 730 days, unless an exemption applies.

Properties acquired before January 1, 2025 can still be taxed if they are sold on or after January 1, 2025 after being owned for less than 730 days, unless an exemption applies. The tax is separate from the federal property flipping rules and is not harmonized with federal or BC income tax.

Who can be liable and what counts as taxable property

Any person who disposes of a taxable property can be liable, whether an individual, corporation, partnership or trust. The seller may be a BC resident or a resident anywhere in the world.

Taxable property is a beneficial interest in residential property, or a right to acquire one. This includes property with a housing unit, residentially zoned property, and assignments of purchase contracts such as presale condos. Assigning a presale contract is therefore taxable.

• Gifts, leases, mortgages, subdivisions and deemed dispositions under other legislation are generally not treated as dispositions.
• A gift from a related person is not blanket-exempt: it is deemed acquired on the date the related giftor originally acquired it, so ownership periods combine.

How days are counted and how the tax is worked out

Days of ownership run from the acquisition date to the disposition date. Acquisition is generally the day you pay for the property and disposition the day you receive the money; for most people both are the closing date. For presale contracts, the acquisition date is generally the day you pay for the contract, and for an assignment the disposition date is generally when you receive money from the assignee.

The rate is 20% where the property is disposed of within 365 days, then decreases gradually over the next 365 days, and the tax no longer applies at 730 days. Between those points the rate is 20% × [1 − (days held − 365) / 365], rounded to the nearest one-thousandth.

Taxable income is proceeds of disposition minus the cost to acquire the property minus the cost to improve it. Net taxable income subtracts the primary residence deduction, and a negative result is deemed to be zero.

A primary residence deduction of up to $20,000 is available if you owned the property for at least 365 consecutive days before disposing of it and lived in a housing unit on it as your primary residence. It is proportionate if you dispose of only part of your interest. It does not apply to assignments of presale contracts.

Exemptions you may be able to use

Some exemptions require a filed return and others do not. The table sets out the groups.

Life circumstance exemptions include these situations:

• Arranging your affairs in anticipation of a death, or moving into a home received through a related individual's death.
• Serious illness or disability that was unexpected when you bought.
• An eligible relocation for work or a full-time post-secondary program, subject to distance tests.
• A change in household membership, including having or expecting a child.
• Breakdown of a marriage or common-law partnership, if you have lived separate and apart for at least 90 days before the disposition.
• Involuntary termination of employment, which does not apply to self-employed individuals.
• A threat to personal safety.
• A housing unit destroyed or uninhabitable after a disaster or dangerous event.
• Expropriation, a lottery win, an estate distribution, or a foreclosure sale.
• Delayed completion of a unit to be built, where the new written completion date is more than 365 days after the original.

Builders and developers may qualify, even if no construction occurred before disposal. Land with no housing unit when acquired may qualify if you carried out building activity. A substantial renovation, demolition and rebuild, or adding a housing unit may qualify if the work follows a local government bylaw or the BC Building Code.

For dispositions between related persons, all parties to the Contract of Purchase and Sale must be related, and the exemption is not available for trusts. Bankruptcy and insolvency exemptions also exist. Whether you fit an exemption often turns on details such as who is a related person, distances and what was unexpected, so it is worth checking with a professional.

Filing deadline and penalties

A return must be filed within 90 days of the sale if you are subject to the tax or if your exemption requires filing. You must still file a return to claim any life circumstance exemption, or you may face penalties.

No return is needed if you owned the property for more than 729 days, if an exemption that does not require filing applies, or if you are a developer entering an initial presale agreement with a first purchaser.

The late-filing penalty is the greater of $500 or 5% of the balance owing on the due date, plus 1% × A × B, where A is the greater of $500 and the balance owing and B is the complete months late, up to 12. Interest starts the day after the return due date at prime plus 3 percent, calculated and compounded monthly. Penalties and interest may be waived for causes such as disasters, serious illness or accident, or errors in information supplied by the government.

What to do next

• Find your acquisition and disposition dates and count the days held.
• Gather your sale price, purchase price and records of improvement costs.
• Check whether the property was your primary residence for at least 365 consecutive days.
• Review the exemption list and note any that might fit your reasons for selling.
• Note the 90-day filing deadline from the sale date.
• Speak with a lawyer or accountant if you are unsure, especially for trusts, estates or part-interest sales.

Frequently asked questions