- The BC home flipping tax applies from January 1, 2025 to anyone who sells taxable B.C. residential property owned for less than 730 days.
- The rate is 20% of net taxable income if you held the property under 366 days, and it falls on a sliding scale until nothing is payable at 730 days.
- A return is due within 90 days of the sale if the tax applies, or if an exemption applies only after you file.
If you bought a home and sold it within a couple of years, you may have heard about the BC home flipping tax. It is a separate tax on profit from short holding periods, and it is not the same as the income tax you report each spring.
This article explains who the tax covers, how the 730-day rule works, which exemptions exist and when a return is due. The details depend on your dates and how you used the property, so a lawyer or accountant can confirm your position.
This article covers the law of British Columbia.
Who the flipping tax applies to
Under the Residential Property (Short-Term Holding) Profit Tax Act, the tax applies from January 1, 2025 to anyone who sells or otherwise disposes of taxable B.C. residential property owned for less than 730 days. That includes individuals, corporations, partnerships and trusts, whether or not they live in B.C..
It also reaches presale contracts, so assigning a contract before the home is completed can count. You do not need to be a professional investor to be caught.
The rate is applied to your net taxable income from the disposition. How that income is worked out in your case depends on your situation, so it is worth confirming with a lawyer or accountant.
The 730-day rule and the rate
The rate is 20% of net taxable income if you held the property for fewer than 366 days. For 366 to 729 days, the rate is 20% multiplied by [1 − ((days held − 365) / 365)], rounded to the nearest one-thousandth of a percent. Nothing is payable at 730 days or more.
| Days held | Tax rate |
|---|---|
| Under 366 days | 20% of net taxable income |
| 366 to 729 days | 20% × [1 − ((days held − 365) / 365)] |
| 730 days or more | Nothing payable |
In plain terms, the longer you hold the property inside that window, the lower the rate. Counting the days correctly is important, so check your dates with a lawyer.
Exemptions and deductions
Some situations need no return at all:
- Reserves under the Indian Act, and Nisga'a and other treaty First Nation lands.
- Listed exempt entities, such as registered charities, co-operative associations, governments, Indigenous Nations, and certain housing and non-profit corporations.
- Real estate investment trust beneficiaries.
- Property used exclusively for a commercial purpose for the entire holding period.
Other exemptions apply only if you file a return: life circumstance exemptions, builders and developers and building or renovating activity, and dispositions between related persons. Presale contracts do not qualify for the builder, developer, building or renovation, or exclusive commercial use exemptions.
There is also a primary residence deduction of up to $20,000 from taxable income. You must have held the property at least 365 consecutive days, lived in a housing unit in it as your primary residence, and held it under 730 days. It is not available when assigning a presale contract, and it is proportionate if only part of your interest is disposed of.
Filing the return
A flipping tax return is due within 90 days of the sale if the tax applies, or if an exemption applies only after filing. It is separate from your annual income tax return. Because several exemptions depend on filing, skipping the return can mean losing an exemption you were entitled to.
This matters most if you expect to rely on a life circumstance, builder or developer, building or renovation, or related-person exemption, since those apply only if a return is filed. Whether your circumstances fit one of them depends on the facts, so it is worth confirming with a lawyer or accountant before the deadline.
What to do next
Start by gathering the paperwork for the purchase and the sale, including any presale contract, so your dates and how you used the home are clear.
- Write down the date you acquired the property and the date you sold or assigned it.
- Count the days held and see which band applies.
- Note how you used the property, including whether you lived in it.
- Check whether you are a listed exempt entity, a related-person transfer, or a builder.
- Calendar the 90-day filing deadline and speak to a lawyer or accountant before it passes.
Frequently asked questions
Does the flipping tax apply if I live in the home?
It can. The tax applies to anyone who disposes of taxable B.C. residential property owned for less than 730 days. If you lived in a unit as your primary residence and held it at least 365 consecutive days, up to $20,000 may be deducted from taxable income.
Is the flipping tax the same as income tax?
No. The flipping tax return is separate from the annual income tax return.
Do I have to file a return if I think I am exempt?
It depends on the exemption. Some, such as Indian Act reserves and registered charities, need no return, while life circumstance, builder or developer, and related-person exemptions apply only if a return is filed.
Can I avoid the tax by assigning a presale contract?
No. Presale contracts are covered by the tax. They also do not qualify for the builder, developer, building or renovation, or exclusive commercial use exemptions, or for the primary residence deduction.
Sources
- gov.bc.ca – BC home flipping tax — www2.gov.bc.ca
- gov.bc.ca – Calculate your BC home flipping tax — www2.gov.bc.ca
- gov.bc.ca – Exemptions from the BC home flipping tax — www2.gov.bc.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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