Real EstateReal EstateReal EstateReal EstateReal Estate 12 January 2023

WHAT IS THE NEW ANTI-FLIPPING LAW?

Do you know that in 2023, CRA introduced a new anti-flipping regulation?

wHAT IS THE NEW ANTI FLIPPING LAW

It states that any profit you make through the sale of a property that you have owned for less than a year or 365 days precisely, is considered business income, and 100% of it is subject to hatHAT taxation.

The profit you make from the property may be subject to a marginal tax rate of up to 53.5% if it is owned in your personal name. If the property is held in a corporation’s name, the profit is subject to 12.2% corporation tax and taxed as active business income.

Even if you had previously moved into the property before closing, this regulation still applies to your principal residence.

The Assignment Sale is covered by this rule as well. The profit you make, net of HST, is recorded as income. If you buy a pre-construction property and sell the contract as an assignment before owning it for for full 365 days, the profit is fully taxed.

If one of the following applies to your transaction, it might be exempt from this treatment:

– Title holder passes away
– A new member of the family who is linked
– Divorce/separation
– Possibility of personal safety issues as a result of property ownership
– Illness or impairment
– Moving for a legitimate job-related purpose
– Getting fired from your job
– Bankruptcy/insolvency
– Expropriation or destruction of your property

Feel free to reach out if you need help with your specific situation, it would be my pleasure to help you!

Bhupinder Singh
Sales Representative
Century 21 First Canadian Corp.
P: 647-323-5310
E: getrealwithinder@gmail.com