Residential Anti-Flipping Rule In Effect

Residential Property Flipping Rule
Individuals 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.