With both the federal and BC governments cracking down on short-term real estate flips, it’s important to understand how these taxes differ and what they could mean for your bottom line. Here’s a straightforward comparison to help you navigate the changes:
Federal Anti-Flipping Tax
Effective: January 1, 2023
Applies Canada-wide
Overview:
Applies when you sell a residential property held for less than 12 months.
Profit from the sale is treated as business income—not a capital gain.
This means you lose access to the principal residence exemption.
Exemptions (if the sale was due to):
Death, divorce or separation, serious illness, disability
Job loss or relocation (over 40 km), insolvency, or major life events
Tax Implication:
Full profit is taxed at your personal income tax rate.
No special flipping tax—just a reclassification of income.
More info from the CRA
BC Property Flipping Tax
Effective: January 1, 2025
Applies in British Columbia only
Overview:
A standalone tax on profits from residential properties sold within 2 years of purchase.
Targets both assignment sales and completed property flips.
Tax Rates:
20% tax on profits if sold within 12 months
Tapers off to 0% by 24 months
Exemptions (similar to federal):
Death, separation, illness, disability
Job loss, relocation, or unforeseen hardship
Applies even to principal residences**, unless you qualify for an exemption.
More info from the BC Government
Key Differences at a Glance:
⚠️ Disclaimer:
The above information is for general awareness only and does not constitute legal or tax advice. Real estate taxation can be complex, and individual circumstances vary.
Always consult with a licensed tax professional, accountant, or lawyer to understand how these rules apply to your specific situation.