Andrew Wilkinson introduces bill to reduce taxes on condo flippers by half

By ThinkPol Staff

British Columbia’s Leader of the Official Opposition Andrew Wilkinson today introduced a private members bill, that if passed, would reduce taxes on condo flippers by half.

Under Canada Revenue Agency interpretation of Income Tax Act, profits made from flipping real estate, including flips and assignment sales (of both pre-construction and resale homes), are generally considered to be fully taxable as business income[1]

But BC Liberal leader Wilkinson’s bill would make profits from presales be classified as capital gains, and only 50% of the income would be taxable.

For example, a speculator flipping a condo and making $200,000 under the existing CRA rules would be taxed $94,000 at the highest tax bracket.

That number falls to $47,000 if Wilkinson gets his way.

But Wilkinson claims and that his bill would “balance the real estate market responsibly” and “improve affordability for homebuyers” by stopping pre-sale speculation, and accuses the NDP of being driven by ideology.

“Unlike the NDP’s so-called ‘speculation tax’ that targets family cabins, this bill will actually address home flipping and artificial inflation of the housing market,” says Wilkinson. “The NDP speculation tax is an ideologically driven attempt to drain away the savings of British Columbians who have invested in their homes.

“We will not target people’s retirement assets,” Wilkinson adds. “Under this bill, only those who are purchasing pre-sale homes or condos and selling them at a massive price increase before completion will be taxed.”

The timing of Wilkinson’s bill is also strange, considering that the governing BC NDP introduced legislation to crackdown on real estate flipping just two weeks ago.

The proposed changes to the Real Estate Development Marketing Act will require real estate developers to collect and report information on pre-sale condo assignments to ensure people are paying the appropriate taxes when these contracts are assigned[2]

“For too long, people who resell condos before they have been built have been inflating real estate prices, without necessarily paying taxes on their gains,” Finance Minister Carole James said. “We are making it fairer for people who want to buy a condo, by making sure those who flip pre-sale condos are paying their fair share.”

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