policy
BUT NO TAX FOR ACROBATIC UNCLES? The federal government is implementing “anti-flipping” rules for residential real estate, to be applied to sales that occur on or after January 1st, 2023. The hope is that this measure will discourage the situation where a home is purchased with the intent of it being held for a short period of time before it is resold at a higher price. Currently, any profits from such transactions are subject to capital gains taxes (whereby 50% of the profit is taxed at the relevant rate) if the home is not a principal residence (PR); if it is a principal residence, the transaction is
exempt from taxation. Under the anti-flipping legislation, “flipped” homes would not be eligible for the capital gains inclusion or the PR exemption. “Flipping” would mean buying and selling within 12 months, with some (non-exhaustive) exceptions, including: changes in life circumstances, birth of children, new job, divorce, death, or disability. Like the foreign buyer ban, this legislation is likely to have marginal impacts overall.
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