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“I’ll Just Flip It and Move On”: What BC Buyers Should Know About Flipping Taxes in 2026

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“I’ll Just Flip It and Move On”: What BC Buyers Should Know About Flipping Taxes in 2026

By Jake Frisson, PREC*, Royal LePage Wolstencroft Realty, Red Seal plumber turned REALTOR®

I hear some version of this every few months: "I'll buy a place, fix it up, sell it and move on." It sounds simple, and sometimes it works out. But in 2026 there are two separate flipping rules in British Columbia, one federal and one provincial, plus the older question of whether the CRA sees your profit as business income at all. There are exceptions, and real ones. But this is not a rule you want to bend, because the bill can be large.

I'm not an accountant or a lawyer, and nothing here replaces advice from one. What I can do is lay out what the government sites actually say, so you go into that conversation with your accountant knowing the right questions.

Is it "2 years" or "1 year"? Actually, it's both

People often say "the anti-flipping tax is 2 years." That's close, but it mixes up two different rules:

  • Federal (CRA) residential property flipping rule: applies to a housing unit in Canada, or a right to acquire one (such as a presale), owned for less than 365 consecutive days before you sell. It applies to sales on or after January 1, 2023.

  • BC home flipping tax: a separate provincial tax under the Residential Property (Short-Term Holding) Profit Tax Act, in effect since January 1, 2025. It applies to profit on BC residential property, including presale contracts, owned for less than 730 days (about two years).

So the "2 years" is BC's rule. The federal rule is 1 year. A quick sale can be caught by both.

What does the federal 365-day rule actually do?

If your property counts as a "flipped property," the CRA says the gain is deemed to be business income, not a capital gain. That means it's fully included in your income, and you can't claim the principal residence exemption, even if you lived there. If you lose money on a flipped property, the loss is deemed to be nil.

The federal rule doesn't apply when the sale can reasonably be considered to happen because of, or in anticipation of, one of these life events:

  • the death of you or a related person

  • a related person joining your household, or you joining theirs (for example, a birth, an adoption or caring for an elderly parent)

  • a marriage or common-law breakdown, after living separate and apart for at least 90 days

  • a threat to the personal safety of you or a related person

  • a serious illness or disability of you or a related person

  • an eligible relocation for work, business or full-time post-secondary school, where your new home is at least 40 km closer to the new location

  • an involuntary job loss for you or your spouse or common-law partner

  • your insolvency

  • the destruction or expropriation of the property

If I keep it longer than a year, am I in the clear federally?

Not automatically. The CRA is clear that if the 365-day rule doesn't apply, it is still "a question of fact" whether your profit is business income. If you bought with the main intention of selling for a profit, the CRA says that gain is business income, and living in the home while you renovate doesn't give you the principal residence exemption.

When the CRA reviews a real estate sale, the factors it lists include:

  • the type of property sold

  • how long you owned it

  • your history of selling similar properties

  • whether you did any work on the property

  • why you sold it

  • your intention when you bought it

In other words, a 14-month flip with a full renovation and a pattern of similar sales can still look like a business.

How does BC's home flipping tax work?

BC's tax is calculated in four steps, according to the province:

  1. Taxable income = sale proceeds, minus your cost to buy, minus your cost to improve the property.

  2. Net taxable income = taxable income, minus a primary residence deduction if you qualify (up to $20,000, only if you owned it at least 365 consecutive days and it was your primary residence).

  3. Tax rate: 20% if owned less than 366 days. Between 366 and 729 days, the rate drops on a sliding scale: 20% × [1 − (days held − 365) ÷ 365]. At 730 days or more, there's no BC flipping tax.

  4. Tax owing = rate × net taxable income.

You must file a BC home flipping tax return within 90 days of the sale if you sold within 729 days, even if you owe nothing or are claiming many of the exemptions. This return is separate from your regular income tax return.

What are BC's exemptions?

BC's life circumstance exemptions are similar to the federal list. They include death (including inheriting a property), serious illness or disability, eligible relocation, a change in household membership, separation after 90 days apart, involuntary job loss (not for self-employed people), a threat to personal safety, bankruptcy or insolvency, a destroyed home, expropriation, a home won in a lottery, foreclosure or court-ordered sale, and a presale completion date delayed by more than 365 days. These require you to file a return.

There are also exemptions for builders and developers in the ordinary course of business, and for a substantial renovation. BC defines that as removing or replacing all or substantially all of the housing unit (other than structural parts like the roof, foundation, exterior walls, interior supporting walls, floors and stairs), or increasing the habitable area by at least 100%. The province's own example: painting, a new patio and new carpet is not a substantial renovation. The work also has to follow local bylaws or the BC Building Code.

Permit note: If you're counting on the renovation exemption, the work has to follow local bylaws or the BC Building Code, so confirm permit requirements with the building department in Maple Ridge, Langley or Mission before you start, and keep your permits and inspection records.

What does this look like in numbers?

Illustrative example only, not anyone's real sale. Say you buy a home for $800,000, put $50,000 into improvements, and sell for $900,000. It wasn't your primary residence, and no exemption applies.

  • Taxable income for BC: $900,000 − $800,000 − $50,000 = $50,000

  • Sold after 200 days: 20% × $50,000 = $10,000 BC flipping tax

  • Sold after 500 days: 20% × [1 − (500 − 365) ÷ 365] = 12.603%, so 12.603% × $50,000 = $6,301.50 BC flipping tax

That's on top of federal income tax. At 200 days, the federal flipping rule would generally treat the full gain as business income. I'm not going to guess your income tax bill, since that depends on your bracket and costs. That's exactly what your accountant should run before you buy.

Does GST apply when you flip?

It can. The CRA says you can be a "builder" for GST/HST purposes if you buy housing intending to substantially renovate and resell it, even if it's a one-time event. Builders generally have to collect GST/HST on sales of new or substantially renovated housing. It's a separate issue from income tax and the BC flipping tax, and it's worth asking about early, because it affects what price actually works.

Where my trades background fits in

I came to real estate from the trades as a Red Seal plumber. When someone shows me a fixer-upper, I look at the scope of work honestly. A "light refresh" and a "substantial renovation" are very different things, both for your budget and, as you can see above, for how the tax rules may treat the sale. Permits and inspections matter too, since BC's renovation exemption requires the work to follow local bylaws or the Building Code. Check with your city's building department before you start.

I won't tell you never to buy a property with a short-term plan. I'll help you see the numbers, the timelines and the options, so you're making the decision with your eyes open.

FAQ

Is BC's home flipping tax in force in 2026? Yes. It took effect January 1, 2025, and the province's pages were updated in May 2026.

Does the federal flipping rule apply to my principal residence? It can. If you sell within 365 days and no life event exception applies, the gain is business income and the principal residence exemption isn't available.

Can I owe both the federal and the BC flipping taxes? They're separate rules, so one sale can be affected by both. Ask your accountant how they interact for you.

Do I need to file the BC return if I'm exempt? Often, yes. Life circumstance, builder, renovation and related-person exemptions all require filing within 90 days.

Does selling a presale assignment count? Yes. Both the federal rule (a "right to acquire a housing unit") and BC's tax include presale contracts.

Thinking about buying a property with a short timeline?

Talk to your accountant first, then let's look at the property, the scope of work and the market together. Call me at 778-238-3463, or book a call with me here: https://calendly.com/jakefrisson

Sources

Jake Frisson, PREC*, Royal LePage Wolstencroft Realty | Red Seal plumber turned REALTOR® | Serving Maple Ridge, Langley, Mission and the Fraser Valley

This article is general information, not legal or tax advice. Speak with an accountant or tax lawyer about your situation.

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