The B.C. government announced a new tax measure aimed at curbing housing speculation.
The Residential Property (Short-term Holding) Profit Tax Act, also known as the B.C. home-flipping tax, will impose a charge on residential properties sold within two years of purchasing.
“Buying a home is one of the biggest milestones in people’s lives – whether it is their first apartment or sizing up for a growing family – everyone wants to find a place to call home and build a good life,” said Katrine Conroy, Minister of Finance. “We don’t think families should have to compete against wealthy speculators when they are purchasing a home, which is why we’re taking action against investors who use the housing market as a stock market.”
B.C. officials said the legislation is meant to discourage investors from buying a property with the intention of making a quick profit.
“Homes are meant to be lived in by people in our communities, not used for speculation,” said Ravi Kahlon, Minister of Housing. “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.”
B.C. officials said revenue collected through this tax will go towards B.C.’s housing programs and building new homes across the province.
“We see the Province has been putting policies in place that will make homeownership in multi-family communities affordable,” said Tony Gioventu, executive director, Condominium Homeowners Association of BC.
“The tax will slow the speculator frenzy that happens when a flippable property is listed for sale frequently, resulting in unauthorized, unpermitted rushed alterations, leaving communities with a legacy of building failures and conflict. This new tax, partnered with the expanded first-time homebuyers benefit, will help give people the boost they have been needing to be able to purchase their first home and support sustainable communities.”
There will be exemptions for people who face unavoidable life changes, such as divorce, death, illness, relocation for work, job loss or a change in household membership.
Builders who add to the housing supply, including housing on a residential property or adding a suite or housing unit to a property that has an existing home will also be exempt from this tax.
The tax will take effect Jan 1, 2025.
– with files from Ryley McCormack, My East Kootenay Now staff