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]https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2018/flipping-houses-condos-know-your-tax-obligations.html.

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]https://archive.news.gov.bc.ca/releases/news_releases_2017-2021/2018FIN0019-000724.htm.

“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.”

References   [ + ]

1. https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2018/flipping-houses-condos-know-your-tax-obligations.html
2. https://archive.news.gov.bc.ca/releases/news_releases_2017-2021/2018FIN0019-000724.htm

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

  1. Ted Cruz says:

    1. Developers have paid a premium for land and must sale presales at certain$ per sf. They see the writing on the wall that its game over. Big loses coming for the big guys.

    2. This guy is being paid, directly or inderectly and must perform.

    3. He or family members could be heavily invested in the condo market and must protect their investment.

    4. Possibly no functional brains cells, only empty cells swimming.

    5. Just born really stupid.

    6. Being threatened that secret pictures of him cross dressing will be released.

    Pick 1 from the above or combine 2 or more together for ultimate accurate results. Have fun.

  2. nonconfidencevote says:

    Wilkinson.
    Another partisan politician in an endless procession of partisan politicians that will take the opposing view 100% of the time even when they know a “flippers” tax will actually help reduce the ridiculous prices of housing caused by the very same flippers and speculators.

    May his Lobbyist pals in the Real Estate Industry suffer unending financial misery in the next few years…
    My heart pumps purple pee for all the realturds about to face the reality of finding a real job in the new economy about to swarm over the cesspool known as the real estate cartel.

    Listings still climbing in the Lower Brainland
    Sales still tanking…..
    Interest rates bumping up again next month….
    Happy housing crash everyone.

  3. nonconfidencevote says:

    Well, well, well.

    Do the Real Estate developers know something is in the wind?
    Sales tanking.
    Projects cancelling.
    Could a housing price implosion and a “Made in Canada” recession be far behind?

    https://www.marketwatch.com/story/canadian-housing-starts-decline-49-in-april-2018-05-08-8485530

    Stay tuned all you flippers and speccer’s out there.
    Wouldn’t want to see you get caught with your pants down……

  4. Allie G says:

    The Liberals just keep finding new ways to screw over British Columbians, don’t they? The NDP is trying to find ways to reverse the disaster of the 2001-2017 increase in property values that put us in the shameful position of 3rd least affordable housing market in the world.
    To do that requires clamping down on the practices which took us here: where per Stats Can the Median Household Income in Metro Vancouver is under $80K but the Benchmark Detached house is over $1.6M.
    Local income tax paying full-time residents are being systematically shut out of decent affordable housing within a reasonable commute to work so that the moneyed class can make a killer profit building, flipping, selling our housing like a commodity.
    In the last five years of the Liberal Party’s control of BC Government Metro Vancouver housing skyrocketed SIXTY percent in value.
    What percentage of locals saw their incomes skyrockeet 60%? Perhaps those who flip condos. Pretty much no one else.
    Enough of the insider scams.
    Now is when we have to ensure that housing is about shelter and not speculation.

  5. brett smith says:

    lemme guess? the-less-than charming snake charmer will pass the tax burden over to welfare recipients.

  6. Mike says:

    If CRA says it’s, by definition, business income…then it’s business income.
    Many of the developers have deals with one another where they buy several presale units in each others buildings. This drives up demand and, therefore, prices. Once complete, they sell the units and make large profits on the backs of those that will actually live in the building. Sounds like business income to me, so they don’t deserve a break on taxes. And no, it’s not a theory…this comes directly from the mouths of developers in the Whalley area.

    • Natalie says:

      He( Andrew Wilkinson) has no any decency. I will never vote for him and all my friends.

      Just WoW! It is even more worse than I thought!
      Thanks GOD we got rid of of Christy and all her scam team!

  7. Dr Peter Njenga says:

    I cannot believe what Andrew is thinking about. Business profit will never be a capital gain both from CRA point of view and from investors point of view. Flipping by its design and motive is business profit.So then, why does he think reducing tax on flipping profit will help to stabilize housing prizes.I think Liberal made a great error to elect him as our potential premier. Just my thoughts…and no offense.

  8. Sukh Hayre says:

    Sukh’s Thoughts: This is never going to pass, so it is just noise. If it did pass, it would only be on provincial taxes owed, not the much larger federal tax portion, BUT, it might be enough to allow the bubble to deflate in a more “controlled” manner, but I doubt it. Regardless, all this does is ensure that the needed consent is manufactured as this will almost certainly ensure that even more people will agree with what the NDP is doing compared to what the Liberals are proposing.

    I wonder how many people that have flipped these properties have reported the income as a capital gain instead of as business income? Will the possibility of the change coming into play in the near future (if Liberals regain power) encourage flippers to hold onto their properties (hoping for lower taxes), as they wait, anyways, for the market to bounce back?

  9. Robin Sweeny says:

    May he never become premiere….

  10. Robert says:

    He is suggesting a change that would require the federal Income Tax Act & Excise Tax Act to have to pass new legislation. Therefore, a BC Opposition Leader has zero clout at the federal level. So it is only a political gamesmanship to get brownie points from the voters.
    1. Under the ETA, real property flips are an adventure in the nature of trade, which is included in the definition of a “commercial activity” (ETA ss. 123(1)).
    2. A flipper is considered a builder (ss. 123(1)), so any new properties flipped are subject to GST/HST.
    3. If the ETA concludes the person is a builder, and it concerns real property, and is therefore a commercial activity, then the Income Tax Act has to also conclude it is a commercial activity.

    The man did not think this through.

  11. Paul says:

    Wilkinson is a mini me Christy Clark !

  12. Natalie says:

    He( Andrew Wilkinson) has no any decency. I will never vote for him and all my friends.

Leave a Reply

Your email address will not be published.