Flipping houses can be a lucrative investment strategy, but Canadian taxpayers should be aware of recent changes to the tax laws that may increase their tax liability, especially if the property was owned for less than one year. Profits from the sale of a property held for less than one year are considered to be business income (not capital gains or even principal residence exemption), and will be included in your taxable income. This may even apply if you sell your principal residence less than a year after it was purchased.
- There are some possible exceptions to this new rule, including if you had to sell your principal residence early due to a death, separation, birth, safety issue, illness/disability, employment change, insolvency or involuntary disposition. Contact our office for more details.
This new rule applies to transactions occurring on or after Jan 1, 2023.
