The Canadian government is attacking flippers w/ eXp realtor Jessi Johnson
In this episode of Own Your Life, we plan to cover the current hot topics:
~ The Canadian government’s decision to target flippers √
~ How this impacts potential revenue √
~ And ways to get around this √
👉 Learn more, call Jessi at 604 716 6474, email email@example.com or schedule a time to chat here: https://calendly.com/jessirealestate
First off, to be clear, we are not accountants, nor are we providing accounting advice. Beginning January 1st, 2023, the Canadian federal government is implementing a new Residential anti-Flipping Rule. The goal is to minimize home flipping, but why exactly?
Individuals who sell their residence within 12 months of acquiring it will be taxed as business income. They will be ineligible for either the 50 percent capital gains rate or the principal residence exemption. There are exemptions for “life events” such as a divorce or death. Now what the heck does this mean?
Any profit from the sale of residential real estate (including rental property) within a year would be taxed as business income. Previously “flippers” had to pay a 50% capital gains tax but that is no more. I think this is rather frustrating, why stop an entrepreneur from taking an outdated or trashed property from making it nice and livable. Yes, I am a little biased because I love flipping and wrote a best-selling book on it. I just don’t see the gain from this and how it helps our housing problems.
Let’s cover some exemptions and methods around this
~ A new baby, adopted child or care for an elderly parent
~ Breakdown of a marriage or common-law partnership
~ A threat to personal safety, such as domestic violence
~ Change of employment location
~ Involuntary disposition, such as from a natural or human-caused disaster.
At the end of the day, now you have to renovate the home, rent it out and then evict someone in 12 months to sell. To me, that does NOT seem in the best interest of the general public. Feel free to reach out to us with more questions but please keep specific accounting quotes for your accountant. Don’t have an experienced accountant who knows real estate? We can provide you some solid recommendations. What do you think about this? We would love to hear your opinion.
Well, that’s all for this episode, don’t forget to pick up a copy of my best-selling book on Amazon, Rockstar Real Estate Investing if you haven’t yet and we are here for your questions at any time.
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Want to chat? Book time to chat with Jessi here: https://calendly.com/jessirealestate
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👉 Learn more, call Jessi at 604 716 6474, email firstname.lastname@example.org or schedule time to chat here: https://calendly.com/jessirealestate