Just announced this week, what you need to know!
The home flipping tax was announced in Thursday’s 2024 budget and is set to come into effect on Jan. 1, 2025. If you purchase a home and sell it within 2 years you will be subject to a tax up to 20% of the increase in value over that time. The seller will be taxed up to 20% on profits made on a property sold within 12 months. This tax declines to 10% after 18 months.
It will not apply to land or portions of land used for non-residential purposes, and the province says certain exemptions will be allowed for life events such as “divorce, death, disability or illness, relocation for work, involuntary job loss, change in household membership, personal safety or insolvency.”
People selling their primary home within two years of purchase will also be allowed to exclude up to $20,000 when calculating their taxable income.
The tax is expected to bring in about $11 million in revenue in the first half of 2025, and then $43 for the next two full years of its implementation. The province says that money will go directly into building more affordable homes.
Starting April 1, 2024, the threshold to be eligible for the first-time homebuyers’ exemption will be increased from $500,000 to $835,000, with the first $500,000 exempt from the tax. The phase-out range for the complete elimination of the exemption will be $860,000, while properties with a fair market value under $500,000 will be completely exempt.
A brand-new PTT exemption will be introduced for buyers of qualifying rental housing buildings. This specific PTT exemption will apply to transactions for such buildings between January 1, 2025, and December 30, 2030. The goal of this change is to stimulate rental housing development.
The provincial government anticipates these various exemptions will reduce transaction costs by over $100M per year. Even with the changes, PTT growth is expected to rise by an average of 8.6% annually over the next 2 fiscal years.
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Greater Vancouver REALTORS® (GVR), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the GVR, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the GVR, the FVREB or the CADREB.
Comments:
Post Your Comment: