Will I pay BC's home flipping tax if I sell within two years?

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If you sell a BC home, or land zoned for homes, within 730 days of buying it, you owe the Province up to 20% of the profit, falling to nothing at two years, unless an exemption in the Act fits. It is a provincial tax on the seller, separate from income tax and from the property transfer tax the buyer pays. Look up the address or PID on PlaceDossier to see the record for that lot. What it covers: A home in BC with the land under and around it, or land zoned all or in part for residential use with whatever stands on it, and a right to buy either, such as a presale contract (s. 1). A manufactured home or float home on its own isn't a housing unit under the Act, though land zoned for homes under one still counts (s. 1). Whether a rural zone counts as zoned for residential use is a question for the Province (our reading). The rate: Sold within 365 days, 20% of the profit; from day 366 the rate falls evenly each day to nothing at day 730 (ss. 8, 9). The days count from the day you acquired it to the day the sale's money is receivable (s. 4 (2), (7)); a presale counts from the day you signed the contract (s. 4 (3)), and property bought from a related person from the day they bought it (s. 4 (4)). The profit: The sale price less the cost of buying (the price, property transfer tax, legal, appraisal, registration, inspection, title insurance, survey and GST costs) and the cost of lasting improvements and major appliances sold with the home; routine repairs, maintenance and financing costs don't count (ss. 13 to 17). The $20,000 deduction: An owner who held the property for at least 365 days in a row and lived in a home on it as their primary residence may take up to $20,000 off the profit, in proportion to their share of it (s. 12). Exemptions for life events: No tax when the sale can reasonably be put down to a death, a serious illness or disability, a move for work or full-time studies that brings you at least 40 km closer to it, a related person joining the household, a marriage or common-law breakdown with 90 days apart, losing a job, a threat to safety, bankruptcy or insolvency, a home made uninhabitable by fire, flood, earthquake, landslide or a spill, or expropriation (s. 25). Other exemptions: Building a home on land that had none, a substantial renovation or an added housing unit done under the bylaws and the building code, builders and developers in the business of it, a sale to a related person, a forced sale by a lender or a court, property inherited or won in a lottery, a presale delayed by more than a year in writing, and property on reserve, Nisga'a and treaty lands (ss. 20 to 30). Charities, co-operatives, governments and Indigenous nations are exempt as persons (s. 18). Filing: The seller files a return for each sale within 90 days of it and pays the tax with it, even when an exemption applies, except for the exempt persons, reserve and treaty lands and wholly commercial property (ss. 31, 35, 37). Unpaid tax can be registered as a lien against the seller's land (s. 79). Income tax as well: Separately, Canada's flipping rule taxes the gain on a home held under 365 days in a row as business income, not a capital gain, with the same kinds of life-event exceptions, and a loss counts as nil (Income Tax Act s. 12 (12) to (14)); the principal residence exemption then doesn't shelter it (our reading). What it means for a buyer: The tax falls on whoever sells. Buy knowing that selling within two years, a presale assignment included, can cost up to a fifth of the profit, and keep the paperwork that proves your costs from the first day.

Will I pay BC's home flipping tax if I sell within two years?

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