As your trusted real estate experts in Nanaimo and Central Vancouver Island, The Shanon Kelley Realty Group is here to help you understand the new BC home flipping tax that took effect January 1, 2025. This significant change affects property owners across Vancouver Island, from Nanaimo to Parksville, Qualicum Beach, and beyond.
What is the BC Home Flipping Tax?
The new tax, officially known as the Residential Property (Short-Term Holding) Profit Tax, applies to properties sold within 730 days of purchase. This measure aims to promote housing stability throughout British Columbia, including our growing Vancouver Island communities. The provincial government estimates approximately 4,000 properties will be subject to this tax in 2025.
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Tax Rates and Timeline
Here’s what property owners in Nanaimo and across Vancouver Island need to know about the tax rates:
- 20% tax on profits if sold within 365 days (first year)
- A gradually decreasing rate for properties sold between days 366 and 729
- No tax applies after owning the property for 730 days or more
Important Note: All property sellers must file a tax return within 90 days of the sale if the property was owned for less than 730 days, even if claiming an exemption.
Important Exemptions to Know
Whether you’re in Nanaimo’s Hammond Bay area, North Nanaimo, or anywhere on Vancouver Island, several key exemptions protect homeowners who need to sell due to life circumstances:
Life Circumstance Exemptions
- Job relocation (particularly important for our mobile Vancouver Island workforce)
- Divorce or separation
- Death in the family
- Severe illness
Property and Entity Exemptions
- First Nations lands (including local Vancouver Island First Nations territories)
- Commercial-use properties
- Registered charities
- Government bodies
- Indigenous Nations
- Non-profit organizations
Primary Residence Benefits
For Nanaimo homeowners selling their primary residence, a special deduction is calculated as $20,000 multiplied by your beneficial interest in the property, provided:
- You’ve owned the property for at least 365 consecutive days
- You’ve used it as your primary residence during ownership
For example:
- If you own 100% of the property: $20,000 deduction
- If you own 50% of the property: $10,000 deduction
- If you own 25% of the property: $5,000 deduction
What This Means for Nanaimo Real Estate
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As Nanaimo continues to grow and attract new residents from across Canada, understanding these tax implications is crucial. While the tax aims to discourage speculation, the various exemptions protect legitimate homeowners who need to sell due to changing circumstances.
Central Vancouver Island Market Impact
The tax may affect different areas of our region differently:
- Nanaimo’s urban core and developing areas
- Retirement communities in Parksville and Qualicum Beach
- Growing communities like Lantzville and Cedar
- Investment properties in popular areas like Downtown Nanaimo and the University District
Connect With Us
To learn more about how these new tax regulations might affect your real estate decisions in Nanaimo and Vancouver Island:
- Book a no-obligation consultation to discuss your specific situation
- Office: 4200 Island Hwy N, Nanaimo, BC V9T 1W6
- Phone: 250-758-7653
- Email: [email protected]
The Shanon Kelley Realty Group is proudly serving Nanaimo and Vancouver Island communities. Licensed under the Real Estate Services Act of British Columbia.
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