David Eby promises new BC flipping tax on homes based on ownership duration
A home that is traded between multiple different owners over a span of only a few years, sometimes merely months apart, suggests the property is being used as an investment purpose for a quick profit — not for its intended purpose as a shelter.
David Eby is hoping to make this practice much harder by implementing a new BC flipping tax.
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In his housing platform announced today for his campaign to become the next Premier of British Columbia, he states the flipping tax will apply on the sale of the home. The rate of the tax is based on a scale for how long the property is owned, with the tax rate going up for those who hold the property for the shortest period of time, and the tax rate going down to 0% the longer the property is held. After two years, the flipping tax rate automatically drops to 0%.
The flipping tax is intended to significantly slow down the rapid rate of home price escalation from speculative demand, but it is not intended to discourage people from buying homes for long-term rental investment opportunities.
Some exceptions for the flipping tax include death of the owner, employment loss, divorce, or disability. As well, builders will be exempted to ensure it does not hamper new housing supply.
“The objective is to prevent flipping rather than generate revenue to a select few, therefore there will be significant notice in advance of implementation to allow people to sell their investment properties and increase housing supply in the market,” reads his platform.
“Because this is a designed to discourage real estate speculation, any revenue will go back into building homes for British Columbians.”
Additionally, Eby has vowed to punish gang activity involved in the housing market, and tackle wealthy individuals who avoid paying their fair share in property taxes. This includes a new provincial tax enforcement team that identifies and tax audits people who declare poverty-level incomes, but buy multi-million dollar luxury homes.
Eby’s flipping tax proposal is just one component of his sweeping housing platform, which includes various other supply-generation measures through the creation of the new BC Builds public housing development initiative, and measures through zoning and changes to the municipal development permit review process.
Eby is the MLA for Vancouver-Point Grey. This past summer, he resigned from his cabinet roles of BC Attorney General and the Minister Responsible for Housing to run in the BC NDP’s leadership race.
BC NDP members are expected to select Eby as their new party leader later this fall, and effectively the province’s new Premier to replace John Horgan, who has decided to resign. Climate activist Anjali Appandurai is Eby’s only challenger.
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