BC home flipping tax: the rate, the 730-day rule and a worked example
The BC home flipping tax is 20% of the profit on a residential property sold within 365 days of buying it. Between day 366 and day 730 the rate falls in a straight line to zero, and at 730 days it no longer applies. It started January 1, 2025, a return is due within 90 days of the sale, and it is charged on top of federal income tax.
Updated October 27, 2026. Rules and formula from the BC government pages linked below (last updated June 8, 2026).
What is covered
- Any beneficial interest in residential property in BC: houses, condos, land zoned residential, and rights to buy, including assignments of pre-sale contracts.
- Applies to individuals, corporations, partnerships and trusts.
- Property bought before 2025 is caught if sold on or after January 1, 2025 within 730 days of purchase.
- Leases, mortgages, gifts and title changes with no change in beneficial ownership are not dispositions.
How the tax is calculated
- Taxable income = sale price minus the cost to acquire the property minus the cost to improve it.
- Held 365 days or less: rate is 20%.
- Held 366 to 729 days: rate = 20% x [1 minus (days held minus 365) / 365], rounded to the nearest thousandth of a percent.
- Held 730 days or more: no tax and no return.
- Primary residence deduction: up to $20,000 if it was your home and you owned it at least 365 consecutive days before the sale. Not available on a pre-sale assignment.
Worked example: a Kelowna contractor flips a house
Bought for $700,000, spent $60,000 renovating, sold for $850,000. Taxable income: $850,000 minus $700,000 minus $60,000 = $90,000. Not a principal residence, so no deduction.
- Sold on day 300: rate 20%, BC tax $18,000.
- Sold on day 500: rate 20% x [1 minus (135 / 365)] = 12.603%, BC tax $11,342.70.
- Sold on day 730: BC flipping tax $0.
Holding 200 more days (day 300 to day 500) in that example saves $6,657 of BC tax. Carrying costs (mortgage interest, insurance, utilities) often cost less than that, which is why the sale date matters as much as the sale price.
The federal rule runs at the same time
Separately, the CRA treats profit on a home sold within 365 days of purchase as business income, fully taxable, with no principal residence exemption, unless a life event exception applies (CRA: residential property flipping rule). A quick flip can be hit by both: federal and BC income tax on the profit, plus the BC flipping tax.
Filing and paying
- File a BC home flipping tax return within 90 days of the sale, online through eTax BC. It is separate from your income tax return.
- Some exemptions (for example certain life events and builders) only apply if you file a return to claim them.
- No return is needed if you owned the property more than 729 days.
FAQ
Does the clock start at the contract date or the completion date?
Days of ownership have their own rules on the BC government's days-of-ownership page. Check them before choosing a completion date, because a few days can change the rate.
Can a loss on one flip offset another?
Net taxable income cannot go below zero on a property; check the calculation page for how losses are treated.
Does it apply to my rental property?
Yes, if it is residential and sold within 730 days, unless an exemption applies.
Before you list a property you have owned less than two years, talk to your accountant about both the BC and federal rules.
Sources: BC government: BC home flipping tax; BC government: calculate your tax; CRA: residential property flipping rule.