Premier David Eby has been clear that speculators are in his crosshairs, and with the 2024 budget his government has announced details of a new 'BC Home Flipping Tax.'
The Ministry of Finance estimates the tax could generate about $43 million a year in tax revenue.
What could go wrong you ask? It’s right there… $43m a year… That doesn’t get deducted from the profits of the speculators, it comes out of the equity in the homes that get sold. The flippers aren’t gonna eat the tax, they’re going to add it to the cost of the homes they flip.
The law isn’t going to mitigate flipping much, it’s going to add $43m/year to the amount home prices increase by, and when people see the neighbors house values go up, they’ll demand more for their non-flip sales as well.
It doesn’t take a mathematician to realize that a 20% price hike every time a home is sold is an impossibility. It will absolutely have an effect on flipping volume and turnover duration.
What could go wrong you ask? It’s right there… $43m a year… That doesn’t get deducted from the profits of the speculators, it comes out of the equity in the homes that get sold. The flippers aren’t gonna eat the tax, they’re going to add it to the cost of the homes they flip.
The law isn’t going to mitigate flipping much, it’s going to add $43m/year to the amount home prices increase by, and when people see the neighbors house values go up, they’ll demand more for their non-flip sales as well.
It doesn’t take a mathematician to realize that a 20% price hike every time a home is sold is an impossibility. It will absolutely have an effect on flipping volume and turnover duration.