Residential Property Flipping RuleIndividuals who purchase a residential property and sell it within 12 months of their purchase may be subject to the
Residential Anti-Flipping Rule. Under the new rules, any profit from the sale of residential real estate (including rental property) within a year would be taxed as business income and ineligible for either the 50 per cent capital gains rate or the principal residence exemption. Exemptions include:
- household addition, such as birth, adoption, or care of an elderly parent,
- breakdown of a marriage or common-law partnership,
- threat to personal safety, such as domestic violence,
- change in employment,
- insolvency, or
- involuntary disposition, such as from a natural or human-caused disaster.
Now it's more important than ever to speak with your accountant if you plan on buying and then selling within one year.