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CBC News Vancouver has a great article that summarizes the new flipping tax the Provincial Government in BC is introducing later this year.

Click here for a direct link to the article BC to tax sellers who flip property after 2 years or less

Key points on this new tax mentioned in the article include:

  • tax rate will be 20% for properties sold within one year of purchase
  • the tax rate slides down to zero between 366 and 730 days after acquisition but would still be 10% even after a year and a half of ownership
  • The plan is to have it in effect for properties sold on or after Jan. 1, 2025 and will also apply to properties purchased before then.
  • The tax will apply to income from the sale of properties with a housing unit and properties zoned for residential use. It also applies to income made from condo assignments.
  • It does not apply to land or portions of land used for non-residential purposes, according to the government's budget documents.
  • Other exemptions under the tax include life circumstances such as separation, divorce, death, disability or illness, relocation for work, involuntary job loss, change in household membership, personal safety, or insolvency.
  • The tax is to be paid in addition to any federal or other provincial income taxes incurred from the sale of property.
Here's a video from Global News on the same topic:

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How Property Taxes are Calculated in B.C.

Around late May or early June, property tax notices typically get sent out to homeowners and property owners in B.C. It is often a time of angst when people open up their property tax bills. But many property owners may not really understand how their property tax amounts get generated.

In British Columbia, property taxes are calculated based on the assessed value of the property and the applicable tax rates. The assessment of a property's value is conducted by the British Columbia Assessment Authority, an independent agency responsible for determining the assessed values of all properties in the province. They use a valuation date of July 1, each year. This figure then appears on assessment notices that get mailed out the following January.

Here are the key steps involved in calculating property taxes in British Columbia:

1. Property Assessment: BC Assessment assesses the value of each property in the province. They consider factors such as location, size, age, condition, and comparable sales in the area. Property assessments are updated every year in the province.

2. Property Classification: Properties in British Columbia are categorized into different classifications, including residential, commercial, industrial, recreational, and others. Each property class has its own tax rate, which is determined by the local government authorities.

3. Tax Rates: Municipalities, regional districts, and other local government authorities set tax rates for each property class within their jurisdiction. These tax rates are expressed in terms of a certain number of dollars per $1,000 of assessed property value.

4. Calculation: To calculate the property tax owed, the assessed value of the property is multiplied by the applicable tax rate. For example, if the assessed value of a residential property is $500,000 and the tax rate is $5 per $1,000 of assessed value, the property tax would be $2,500 ($500,000 / $1,000 * $5).

5. Additional Levies: In some cases, additional levies may apply to the property tax calculation. These can include local improvement charges, school taxes, or other special assessments imposed by the local government.

6. Property Tax Due Date: Property taxes in British Columbia are typically due on a specific date set by the local government authority. Late payment of property taxes may result in penalties or interest charges.

It's important to note that property tax calculations can vary depending on the municipality or regional district in which the property is located. Each local government authority has the flexibility to set its own tax rates and additional levies within the framework established by provincial legislation. Property owners can usually find detailed information about their property taxes on the local government's website or by contacting their municipal or regional district office.

Finally, there are some relief programs to deal with property taxes. I've discussed these in other blog posts. These include:

1) The Homeowners Grant

2) Property Tax Deferment Program

Nobody likes to pay property taxes. However, we need to remember that they do help fund local services like police, firefighters, road maintenance, community centres, parks etc. These are things we all depend on to enjoy a high standard of living and good quality of life.

If you would like a FREE home evaluation, I'd be pleased to provide an opinion of value as of a certain date. This might help you determine if your property has been fairly assessed by BC Assessment. In turn, this will ensure that you are NOT paying more than your fair share in property taxes. Contact me today if you'd like to chat more on this topic.

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