Finance Minister Katrine Conroy tabled a new house-flipping tax, aimed at taxing homeowners who resell their property within two years.
First announced in February during the unveiling of Budget 2024, Conroy officially tabled the bill Wednesday (April 3). Dubbed the Residential Property (Short-Term Holding) Profit Tax Act, it is also referred to as the house-flipping tax.
READ MORE: B.C. Budget 2024: targets home flipping with new tax on fast resells
The bill aims to crack down on house-flipping in the province with a plan to tax homeowners who resell their property within two years of purchasing it. The tax will apply to income earned from the sale of properties with a housing unit.
Beginning next year, the tax will apply to residential properties resold within two years. Homes resold within the first year will face a tax rate of 20 per cent if the property is sold. The tax rate will then decline to zero over the next 365 days.
The tax is set to take effect on Jan. 1, 2025, but properties purchased in 2023 and 2024 will be subject to the tax if the property is resold within 730 days.
“With this bill, the province is taking action against speculators that use housing only to turn a quick profit. It is about making profiteers think twice about a practice that inflates housing costs during the housing crisis,” Conroy said while introducing the bill Wednesday (April 3).
“We want families to find a home, they can afford and build a good life in the community they love.”
The province estimates that $43 million a year will go back into building homes for people and strengthening housing programs. About 4,000 properties in the next year are expected to be subjected to the tax.
Housing Minister Ravi Kahlon said homes are meant to be lived in by people in the community, “not used for speculation.”
“While some want to allow speculation in the housing market, allowing speculators to make a quick profit - we know that people can’t afford that. We will keep building up supply and take action on the driving forces behind rising prices, including speculation.”
The Finance Ministry says, between 2020 and 2022, an estimated seven per cent of residential houses were sold within two years. Those properties were often resold at a higher price.