What It Is:

• A tax on profits from selling residential property owned for less than 730 days.
• Effective from January 1, 2025, under the Residential Property (Short-Term Holding) Profit Tax Act.

Who It Applies To:

• Individuals, corporations, partnerships, or trusts that sell properties in BC after owning them for less than 730 days.
• Includes non-residents of BC or Canada.

What Is Taxed:

• Profits from selling residential properties, including presale contracts and properties zoned for residential use.

Tax Rates:

• 20% tax on net taxable income for properties sold within 365 days.
• Tax rate decreases over the next 365 days.
• No tax after 730 days of ownership.

Exemptions:

• Specific exemptions may apply (e.g., primary residence deduction or related party transfers).
• Exemption eligibility depends on circumstances and may require filing a tax return.

Primary Residence Deduction:

• Up to $20,000 deduction if:
  • Property was owned for at least 365 days.
  • Property was used as a primary residence.

Days of Ownership:

• Starts on the purchase date (usually the closing date).
• Ends on the sale date (closing date for the sale).

Presale Contracts:

• Ownership starts from the date the contract was signed or assigned.

Filing Requirements:

• A tax return must be filed within 90 days if the tax applies or if an exemption is claimed after filing.
• No filing required if:
  • Property owned for more than 729 days.
  • Exemption applies without filing.

Exempt Transactions:

• Does not apply to leases, gifts, liens, or changes in legal title without beneficial ownership transfer.