B.C. Budget 2024: New house-flipping tax, help for first-time homebuyers

First-time homebuyers will get a tax break, while speculators are being targeted in new housing initiatives unveiled in B.C.’s 2024 budget.

The tax programs come along with new money earmarked for the province’s BC Builds program intended to spur the construction of new rental housing.

The initiatives come with the NDP government claiming 78,000 homes have been “delivered or (are) underway” towards its 2017 election pledge to build 114,000 homes.

Starting in 2025, the province will implement a new “home-flipping tax” to target the profit made from selling a residential property within two years.

Sellers will see a 20 per cent tax on profit if they sell the property within the first year of purchase, with the rate declining to zero over the course of the second year. It will also apply to assignment contracts.

Exemptions will apply “for certain life circumstances” including separation, death, divorce and disability. The province has also pledged exemptions for sellers who “add to the housing supply or engage in construction and real estate development.”

Exemptions, and how they will be assessed and enforced, however, have not been fully fleshed out, according to the Ministry of Finance.

The tax is expected to bring in $43 million in 2025 during the first year it is fully in force.

A house flipping tax was one of B.C. Premier David Eby’s promises during his 2022 leadership campaign.

While the province is aiming a new tax at would-be speculators, it’s also unveiling a tax break for first-time homebuyers and rental housing developers.

As of April 1, 2024, the threshold for the exemption to the property transfer tax for first-time homebuyers is being lifted from properties costing half a million dollars to $835,000. Properties with a