THE NEW 2023 ANTI-FLIPPING RULE
THE NEW 2023 ANTI-FLIPPING RULE
The new anti-flipping tax in Canada is designed to ensure that profits from flipping residential real estate are subject to being fully taxed.
A new tax rule went into effect by the federal government on January 1, 2023 that establishes a time limit for property ownership before it qualifies for the personal residence exemption from capital gains taxes.
Any residential property purchased and sold under the new regulations during a 12-month period will be regarded as business revenue and be taxed accordingly.
This means that if a person sells a home they recently bought, they will be responsible for paying full taxes on 50% of the earnings. Although some exceptions for specific family events were announced, brokerages and associates who know the property they are listing was purchased in the last 12 months need to inform their clients of this potential taxation. As a REALTOR® I will always advise you to seek professional tax and accounting advice if it is a concern.