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The BC home flipping tax: what it costs to sell within 2 years, and who is exempt

Since January 1, 2025, British Columbia taxes the profit on a home sold within 730 days of buying it. Here is how the rate is worked out, what counts as profit, which sellers are exempt, and how it sits beside the federal flipping rule.

By Shawn Kandola, PREC · Published November 5, 2026 · 8 min read

What the tax covers

The BC home flipping tax comes from the Residential Property (Short-Term Holding) Profit Tax Act, which took effect on January 1, 2025. It applies to the profit from selling residential property in British Columbia, including presale contracts, that you owned for less than 730 days. A home bought before 2025 is still caught if it was sold on or after January 1, 2025 inside that window.

It applies to individuals, corporations, partnerships and trusts, whether or not they live in BC. Taxable property means a property with a housing unit, a property zoned for residential use, or a right to acquire one, such as a presale contract you assign.

How the days are counted

The day you acquire a property is generally the day you pay for it, and the day you sell is generally the day you receive the money. For most people both are completion dates, not the dates the contracts were signed. The province's own examples count both the first and the last day: a home bought May 1, 2023 and sold January 31, 2025 was owned for 642 days.

If you bought from a related person, you can be treated as acquiring the home on the date they first acquired it. There is no blanket exemption for a gift, and a gifted property has a cost of $0.

The rate

Within 365 days the rate is 20%. From day 366 to day 729 it falls under the province's formula: 20% multiplied by [1 minus (days held minus 365) divided by 365], rounded to 3 decimal places. From day 730, the tax no longer applies.

What counts as profit

The tax is charged on net taxable income: your proceeds, minus your cost to acquire, minus your cost to improve, minus the primary residence deduction if you qualify. A result below zero is treated as zero, so a loss never creates a refund.

Proceeds are the sale price less legal costs, appraisal costs, a licensed home inspection, a survey and the cost of trading services, which is what you pay your brokerage. Cost to acquire is the price plus property transfer tax, legal costs, appraisal, Land Title registration fees, a licensed home inspection, title insurance and a survey. If you are checking what you paid in transfer tax, this guide to property transfer tax in BC shows how it is calculated, and here is what selling costs usually include.

Cost to improve means improvements of an enduring nature, plus a replaced fridge, range, washer, dryer or other major appliance that is included in the sale. Routine repairs and maintenance, routine painting, carpeting, landscaping, and interest or financing fees do not count.

The $20,000 primary residence deduction

You can deduct up to $20,000 if you owned the property for at least 365 consecutive days and it includes a housing unit you lived in as your primary residence, meaning the place you lived longer than any other while you owned it. The amount is shared by ownership, so 2 equal owners each deduct $10,000. It does not apply to presale contracts.

Say you completed on a Langley townhouse on March 3, 2025 for $690,000, lived in it, and sold to move up to a house, completing on August 28, 2026. That is 544 days, a rate of 10.192%. Proceeds after $26,000 in selling costs are $734,000. Your cost to acquire is $703,000 including transfer tax and legal fees, and you replaced appliances worth $9,000 that stayed with the home. Taxable income is $22,000, the deduction brings it to $2,000, and the tax is $203.84. Sell the same home after 300 days and there is no deduction and a 20% rate: $4,400, before any federal tax.

Exemptions

Most exemptions only apply once you file a return. The life circumstance exemptions for individuals are:

• The death of you or a related person, or selling your own home after inheriting one
• A serious illness or disability of you or a related person
• Relocating for work, business or full-time post-secondary study, where your current home is at least 40 km farther from the new job or school than your new home
• A related person moving in with you, you moving in with them, or having or expecting a child
• Separation, after living apart for at least 90 days before the sale
• Involuntary job loss for you or your spouse, which does not cover the self-employed
• A threat to the personal safety of you or a related person who lives with you
• Bankruptcy or insolvency, a home made uninhabitable by fire, flood, earthquake or similar, expropriation, a foreclosure or court ordered sale, a lottery win, or an inheritance
• A new home whose completion date is pushed back by more than 365 days, with both dates given to you in writing

Builders, renovations and related people

Builders and developers holding property to construct on it are exempt with a return, and so is building a home on land that had no housing unit. A renovation qualifies if it is a substantial renovation, generally 90% or more of the interior removed or replaced or the habitable area increased by at least 100%, or if you demolish and rebuild or add a housing unit, such as turning an unfinished basement into a separate basement suite. The work has to meet local bylaws and the building code. Painting, new flooring and a new patio do not qualify.

Sales between related persons are also exempt with a return. A few exemptions need no return at all: property on a reserve or on listed treaty lands, exempt entities, property received as a REIT beneficiary, and property used only for commercial purposes the whole time you held it.

Presales and assignments

For a presale, the clock starts when you enter the contract, generally the date you pay the deposit to the developer, and assigning the contract is a taxable sale. If you keep the contract and complete, you are still treated as having acquired the home on the contract date, so a long build can carry you past 730 days. Presale sellers cannot claim the $20,000 deduction or a cost to improve, and the builder, renovation and commercial exemptions do not apply to them.

How it fits with the federal flipping rule

The BC tax is separate from the federal property flipping rule, which is explained in the principal residence exemption in BC, and it is not harmonized with federal or BC income tax. Both can apply to the same sale:

Filing and paying

If you sell within 729 days of acquiring, you must file a BC home flipping tax return and pay any tax within 90 days of the sale, through eTaxBC with the Ministry of Finance. It is separate from your CRA return. You must file even if your net taxable income is $0 or you are claiming an exemption, unless it is one that needs no return. Each owner files their own return, so 2 joint tenants file 2 returns, each for 50%. Late filing or payment brings penalties and interest, and you can ask for a waiver if the cause was beyond your control.

If you might be inside the 730 day window, I would rather know at the first conversation, because a few weeks of patience on the completion date can lower the rate. If the home will sit empty while you decide, check the speculation and vacancy tax too.

This is general information, not tax or legal advice. Confirm your own situation with an accountant or lawyer.

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