New data sheds light on property flipping in B.C.

With B.C. poised to introduce a flipping tax, new data from Statistics Canada is shedding light on how many homes are bought and rapidly re-sold – and how profitable the venture has been.

The federal agency looked at sales of residential properties from 2019 to 2021, finding that 2.8 per cent of homes that sold during that period were flipped. StatsCan notes that the definition of flipping, for its purposes, is buying a property and re-selling it within a year. In 2021, a total of 2,095 homes were flipped in the province, according to data released Tuesday.

"Based on this definition, residential properties can be flipped by owners who make no improvements to the house, by investors who renovate to seek capital gains or by individuals who need to sell quickly because of changing life circumstances such as a death, divorce or job change," the report says.

StatsCan also looked at homes that were re-sold within two years of purchase, finding an average rate of 5.4 per cent between 2019 and 2021.

B.C.'s flipping tax applies to properties resold within two years. The rate will be set at 20 per cent of income earned if the home is sold within 365 days, and it decreases steadily over the following 365 days.

The data from the federal agency found condos were more likely to be flipped than single-detached homes. In 2021, for example, four per cent of all condo sales were flips. StatsCan also found the purchase price of flipped properties was generally lower than that of those that were not flipped.

In terms of profit, the "median price gain" on flipped properties was $115,000 in 2021 – which works out to a gross profit of 20.3 per cent.

"These short-term gains occurred in the context of an overall price increase amid a booming real estate market in British Columbia," the report notes.

B.C.'s flipping tax comes into effect on Jan. 1, 2025.