The BC Government has announced its intention to implement a flipping tax in British Columbia proposing to add an additional tax to the proceeds of the sale if a home is sold within two years of purchasing.
BCREA (British Columbia Real Estate Association) Economists have analyzed the proposed tax and show that "flipping" activity is an insignificant share of overall unit sale transactions in BC. The BCREA economists estimate that the flipping tax will lower sales in BC by 1.7 per cent and will have minimal impact on home prices. Moreover, there is risk that the tax will cause potential sellers to delay listing their homes leading to lower resale housing supply and tighter market conditions.
Important for us to note the exemptions in the proposed new flipping tax if there are life circumstances that motivated the sale of the property within 2 years, such as :
- Separation or divorce
- Death
- Disability or illness
- Relocation for work
- Involuntary job loss
- Change in household membership
- Personal safety
- Insolvency