22 Mar 2024
Will The “Home Flipping Tax” Impact Affordability?
The recent proposed house flipping tax introduced by the BC government will come into effect on January 1, 2025, if passed. Under this legislation, any profits made from the sale of a residential home within 2 years of buying it will be subject to a tax, with some exceptions that ensure that the tax does not penalize individuals facing unusual circumstances.
The tax rate is scheduled at 20% if the property is sold in the first year after purchase, 10% if sold after 18 months and slide to zero over the course of the second year of ownership. While the premier David Eby thinks it is not a cure for the current housing woes facing the province, it is designed to help free up more homes.
“The flipping tax is not a silver bullet. If it was a silver bullet, it would have been fired a long time ago. It’s just one-piece pf the overall strategy to deal with housing,” said the Premier.
While many appreciate the intention behind the tax, there is a lot of skepticism that the tax will make a difference and will bring house prices down, despite the government’s aim at discouraging speculators from driving up prices.
Tom Davidoff, Associate Professor of Housing, Real Estate from the UBC Sauder School of Business doesn’t believe that the tax will bring the prices of homes down. “ I think the flipping tax is not important at all for long-run affordability, but it may be important to provide political cover because there are some people – maybe lots of people – who don’t’ want to see their neighborhood densify and believe that BC is expensive not because of an absence of homes for people looking, but rather because of speculation or various nefarious investment forces, “ he said.
Others, like Ryan Dash, a principal with The Vancouver Real Estate Group, is not convinced that another tax will make a huge impact on the low housing market inventory. He would rather see more stimulation and incentives for people to build and put more homes on the market.
Overall, the tax will somehow affect how housing speculators operate in the BC. Those who move into a home, make a few structural and cosmetic changes in a few months and leave, will now have to think twice. The BC government is firmly committed to address the province’s housing woes, and this being an election year, will see some major policy developments.
When you work with our real estate advisors, we enable you to set realistic expectations that help you achieve your real estate goals. If you are looking to buy your dream home or sell a home, contact us by email or call us on 604 913 1000.
The tax rate is scheduled at 20% if the property is sold in the first year after purchase, 10% if sold after 18 months and slide to zero over the course of the second year of ownership. While the premier David Eby thinks it is not a cure for the current housing woes facing the province, it is designed to help free up more homes.
“The flipping tax is not a silver bullet. If it was a silver bullet, it would have been fired a long time ago. It’s just one-piece pf the overall strategy to deal with housing,” said the Premier.
While many appreciate the intention behind the tax, there is a lot of skepticism that the tax will make a difference and will bring house prices down, despite the government’s aim at discouraging speculators from driving up prices.
Tom Davidoff, Associate Professor of Housing, Real Estate from the UBC Sauder School of Business doesn’t believe that the tax will bring the prices of homes down. “ I think the flipping tax is not important at all for long-run affordability, but it may be important to provide political cover because there are some people – maybe lots of people – who don’t’ want to see their neighborhood densify and believe that BC is expensive not because of an absence of homes for people looking, but rather because of speculation or various nefarious investment forces, “ he said.
Others, like Ryan Dash, a principal with The Vancouver Real Estate Group, is not convinced that another tax will make a huge impact on the low housing market inventory. He would rather see more stimulation and incentives for people to build and put more homes on the market.
Overall, the tax will somehow affect how housing speculators operate in the BC. Those who move into a home, make a few structural and cosmetic changes in a few months and leave, will now have to think twice. The BC government is firmly committed to address the province’s housing woes, and this being an election year, will see some major policy developments.
When you work with our real estate advisors, we enable you to set realistic expectations that help you achieve your real estate goals. If you are looking to buy your dream home or sell a home, contact us by email or call us on 604 913 1000.