BC's Home Flipping Tax: What Sellers Need to Know

Since January 1, 2025, BC has taxed the profit on homes sold within two years of buying them. Plans change, with a new job, a growing family or a separation, so it is worth knowing how the tax works before you buy and before you sell. Here is how it is calculated, who is exempt and what you have to file.

The short version

What the tax covers

• Homes and residential land. Properties with a housing unit, and land zoned for residential use.
• Contracts. The right to buy a property, such as a presale condo contract or the assignment of a purchase contract.
• Every kind of owner. Individuals, corporations, partnerships and trusts, whether they live in BC or anywhere else.
• Older purchases too. A property bought before 2025 can be caught if it is sold on or after January 1, 2025 and was owned for less than 730 days.

How the days are counted

Count from the day you acquired the property to the day you sold it, including both days. The day you acquire a home is generally the day you pay for it, which for most people is the completion date. The day you sell is generally the day you receive the money, again usually the completion date.

Presales are different. Your count starts on the date you paid the deposit and entered the contract, not when the building is finished. If you buy an assignment, your count starts on the date of the assignment.

The rate

• 365 days or less: 20% of your net taxable income.
• 366 to 729 days: the rate falls each day, using the formula 20% x [1 - (days held - 365) / 365]. At 450 days it is about 15.3%, at 548 days about 10% and at 650 days about 4.4%.
• 730 days or more: no tax.

The Province gives this example. A home bought for $900,000 sells for $1,000,000 after 398 days, and $10,000 of appliances were added. Taxable income is $90,000, less the $20,000 primary residence deduction, leaving $70,000. At the 398-day rate of 18.192%, the tax is $12,734.40.

Working out your taxable income

• Proceeds. The sale price, less the costs of selling, such as legal fees, real estate commission, appraisals, inspections and surveys.
• Cost to buy. The purchase price plus property transfer tax, GST, legal and land title fees, appraisals, inspections, title insurance and surveys.
• Cost to improve. Lasting improvements, and major appliances sold with the home. Routine repairs and maintenance don't count.
• Primary residence deduction. Up to $20,000, in proportion to your share of ownership, if you owned the home for at least 365 consecutive days and it was your primary residence while you owned it. It isn't available when you assign a presale contract.

Exemptions

The Province lists 14 life-circumstance exemptions. For individuals, they include:

• Your death, or the death of a related individual
• A serious illness or disability
• A move for work or study, when your new home is at least 40 km closer to the new job or school than your old one
• A related individual joining your household, or you joining theirs
• A separation, after living apart for at least 90 days before the sale
• Losing your job involuntarily, which doesn't apply to the self-employed
• A threat to your personal safety

Others cover bankruptcy and insolvency, a home that was destroyed, expropriation, property won in a lottery, property received from a deceased person's estate, foreclosure, and a presale whose completion was delayed by more than 365 days. Builders and developers, and owners who build on vacant land, renovate substantially or add a housing unit such as a suite in line with local bylaws and the Building Code, may also be exempt. Painting and new carpet don't count as a substantial renovation. There is no general exemption for rental properties.

Filing and paying

If you sell within 729 days, you generally have to file a return through eTaxBC and pay any tax within 90 days of the sale. You can pay through your bank, at a Service BC Centre or by mail. That applies even if your profit is zero or you are claiming most exemptions. Co-owners each file their own return. Late filing brings a penalty of at least $500, and tax paid late also carries interest at prime plus 3%. The return is separate from your income tax return.

The federal flipping rule

Federal tax law has its own rule. Since January 1, 2023, the profit on a home, or on a right to buy one, that you owned for less than 365 consecutive days is treated as fully taxable business income. You can't claim the principal residence exemption or the capital gains rate on it. If a life event applies, such as a death, a separation, a serious illness, a job relocation, an involuntary job loss or the destruction of the home, the rule doesn't apply, and the usual tests decide how the profit is taxed. BC's tax is separate from the federal rule.

Questions sellers often ask me

How long do I have to own a home to avoid BC's flipping tax?

At least 730 days, counting both the day you bought and the day you sold. For most people, both are completion dates.

What is the home flipping tax rate?

20% of your net taxable income if you sell within 365 days. After that the rate drops every day until it reaches zero at 730 days.

Do I have to file a return if I owe nothing?

Usually, yes. If you sell within 729 days, you generally have to file within 90 days, even when your profit is zero or you claim an exemption.

Does the tax apply to presale assignments?

Yes. For a presale, the count starts when you paid the deposit and signed the contract, and the $20,000 primary residence deduction isn't available on an assignment.

Is my principal residence exempt?

Not automatically. You can deduct up to $20,000 if you owned it for at least 365 days and lived in it as your primary residence. If a life-circumstance exemption applies, no tax is payable, though you usually still have to file a return.

Weighing a presale or planning a sale? Read Buying a Presale Condo in BC and the BC selling process from listing to completion, or request a free home evaluation.

This article is general information, not tax advice. Talk to an accountant about your situation before you sell. For the Province's guide, see the BC home flipping tax.