Updated: December 16, 2022
The new residential property flipping rule, introduced in Budget 2022, is now law. This rule was included in Bill C-32, which received Royal Assent on December 15, 2022.
The new rule deems profits from a “flipped residential property” as business income to target individuals that misclassify these profits as a capital gain to avoid taxes. It’s important to understand this rule as the Canada Revenue Agency (CRA) has increased the number of audits relating to these types of transactions, which can lead to hefty penalties and interest for non-compliance.
The new rule applies to flipped residential property dispositions that occur on or after January 1, 2023.
Your gain could be fully taxable under this new rule
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