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Important Info About BC's New Home Flipping Tax
Practical Tips for Filing and Deductions
Eli Zbar
March 29, 2025
Another year, another new tax on real estate to contend with: the BC “Home Flipping Tax”
When the law changes, many law firms, along with the BCREA, BCFSA etc. issue detailed guidance. This month’s newsletter highlights a crucial component, not covered by the existing resources we reviewed: How to actually file the Home Flipping Tax return.
We’ll walk you through the Home Flipping Tax filing portal (as it looks at the time of writing in March 2025), and provide examples of how much tax would in fact be payable in a few scenarios.
(note for e-mail readers: this newsletter contains many images, if it’s not displaying correctly, click “Read Online” on the top right)
Why Does The Tax Return Matter?
This Home Flipping Tax return requires a lot of information buyers and sellers may not think to keep on hand, much of which directly impacts the total tax payable.
Realtors and mortgage brokers should familiarize themselves with the portal, document requirements, and permitted deductions to help clients calculate the net sale proceeds destined for their pocket.
Filing The Home Flipping Tax Return
Go to the BC government website
Figure out how many you need to file – usually, one per owner. This table breaks down common ownership structures:
Ownership of taxable property disposed | Ownership of taxable property acquired | Tax returns to be filed |
|---|---|---|
Sole owner Owner of 100% beneficial interest in taxable property | Sole owner Owner of 100% beneficial interest in taxable property | 1 tax return |
Joint tenancy 2 persons | Sole owner Owner of 100% beneficial interest in taxable property | 2 tax returns Each of the 2 owners in joint tenancy is considered to have disposed of a 50% beneficial interest in the taxable property |
Tenancy in common 2 persons, each owning 50% beneficial interest in the taxable property | Sole owner Owner of 100% beneficial interest in taxable property | 2 tax returns Each of the 2 owners in tenancy in common is considered to have disposed of a 50% beneficial interest in the taxable property |
Review the instructions and begin filling out the BC Home Flipping Tax Return
1..Before you begin, make sure you have the following information
2..Choose Your taxpayer type
3..Enter Taxpayer Information
4..Enter Property and Ownership Information. Note: you cannot forward date a return!
5..Enter Acquisition and Disposition Information
6..Enter the Deductions
Determine The Total Home Flipping Tax Payable
After you enter the Deductions, the portal shows the total tax payable
Example 1
Primary residence is sold for $500,000 more than purchase, 435 days after purchasing, subject to certain deductions:
Example 2
Non-primary residence is sold for $500,000 more than purchase, 435 days after purchasing, subject to certain deductions:
—
Example 3
Primary residence is sold for $500,000 more than purchase, 701 days after purchasing, subject to certain deductions
Example 4
If the property is held by more than the owner, each owner must report. If a 50% tenant in common sold their interest in their primary residence for $250,000 more than purchase, 701 days after purchasing, subject to certain deductions, they would report:
The result is the same tax rate, but for half the property, as deductions are split in half, including the Primary Residence Deduction
Deductions: Reducing the Tax Payable
Certain deductions are available, which will reduce the tax payable — for example, when you’re buying, keep detailed records of all this information and be prepared to back up details like the “cost of appliances”.
There are two categories of deductions:
✔ Costs to Improve the Property
You may deduct expenses related to improvements of an enduring nature, including:
The cost of any range, refrigerator, washing machine, dryer, or other major appliance that you replaced and is included in the property sale
Costs to assess the feasibility of substantial renovation of existing property
Costs related to constructing or placing a new housing unit on the property
✔ Costs to Purchase the Property
You may also deduct:
Property Transfer Tax and GST (excluding interest and penalties)
Legal and related closing costs, such as registration fees, title insurance, and a home insurance binder
Costs for inspection, survey, and appraisal
Prohibited Deductions
❌You may not deduct the following costs:
Costs of annual, recurring or routine repair, maintenance or service
Financing costs of an improvement
Financing costs of a major appliance
Any cost paid or payable at the time of filing which has been or will be reimbursed by way or grant, forgivable loan, or similar inducement.
Unreasonable costs, illegal payments
Costs are attributable to commercial property
Fines or penalties related to the purchase, sale, or improvement of the property.
How To Pay The Tax Owing
You must pay in Canadian funds, even if you're paying from outside Canada, via one of these methods:
Through your bank or financial institution
In person at a Service BC Centre
By mail to the Minister of Finance
Did You Know? 🤔
I offer real estate agents and mortgage brokers complimentary short phone consultations. Message me on WhatsApp, or book a call.
A reminder that Arora Zbar LLP has 5 lawyers offering services in real estate transactions, construction disputes, corporate law, commercial litigation, tenancy/strata disputes, and estate planning.
We offer services in English, Punjabi, Hindi, and Farsi.
We are super transparent about pricing, check out our app at www.pricemyconveyance.com - it calculates property transfer tax, too!
Contrary to what people think, a lawyer is not more expensive than a notary. Remember that all lawyers are notaries, but notaries are not lawyers. In my experience, most notaries refer clients to a lawyer as soon as there’s a problem with a deal. Why not start with a lawyer?
Sincerely, Eli Zbar Lawyer |  |
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