The chief economist of the British Columbia Real Estate Association says the incoming tax on flipping houses may not generate as much revenue as the government expects and could only impact a small number of properties. A real estate sign is pictured in Vancouver, B.C., Tuesday, June, 12, 2018. THE CANADIAN PRESS Jonathan Hayward
VANCOUVER – The chief economist of the British Columbia Real Estate Association says the incoming tax on flipping houses may not generate as much revenue as the government expects and might only impact a small number of properties.
Brendon Ogmundson says about 10 per cent of real estate transactions in Metro Vancouver take place within two years of a purchase, and many of those sales would be exempt from the new tax for reasons such as divorce or job relocation.
The provincial budget estimates the tax will generate $43 million in its first full fiscal year, but the association predicts B.C. could lose out on $20 million in property transfer taxes as people delay their sale, and it’s creating new administrative costs.
Premier David Eby told a news conference today that the flipping tax is “not a silver bullet” but anything the government can do to reduce the number of people competing for housing in the market is welcome.
The premier announced the idea of a flipping tax last year and Finance Minister Katrine Conroy released details of the pledge in last week’s budget speech.
As of Jan. 1, 2025, homes sold within the first year after being purchased will face a tax rate of 20 per cent of the profit, while that tax rate drops gradually to zero after two years.
This report by The Canadian Press was first published Feb. 26, 2024.
