BC Govt unveils new 'Home Flipping Tax' to tackle speculation

PTC Web Desk: In a bid to curb property speculation, Premier David Eby's government has introduced the "BC Home Flipping Tax" as part of the 2024 budget. Set to take effect from January 1, 2025, the tax targets profits from the sale of residential homes within two years of purchase, with a sliding scale ranging from 20% for sales within the first year to zero after two years of ownership.

The Ministry of Finance estimates the tax could generate approximately $43 million annually, earmarked for the construction of new affordable housing in the province. Exceptions include a $20,000 exclusion for those selling their primary residence within two years, with specific grounds such as divorce, death, illness, or relocation for work considered as valid reasons to avoid the tax.

The legislation aims to support housing supply, emphasising that the tax is designed not to impede it. Revenues generated will contribute to addressing housing challenges in British Columbia. The mechanism for appealing the tax and required documentation is yet to be finalised, with forms expected to be created by tax administrators post the legislation's formal passage. The budget provides insights into the province's housing market, anticipating a rebound in home sales activity in 2024, with prices projected to rise by an average of 2.3% this year and 2.9% in 2025.

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