Government's 2024 budget includes plans to boost housing supply
British Columbia has shared details about a new tax targeting profits from short-term property sales, alongside tax breaks designed to support first-time homebuyers and stimulate the construction of new rental housing.
The measures were outlined in the government’s 2024 budget and are part of broader efforts to boost housing supply in the province.
“BC continues to take strong action to build more homes for people by speeding up the delivery of new homes, increasing the supply of middle-income housing, fighting speculation and helping those who need it the most,” the government said in its release.
Home-flipping tax to be implemented in 2025
Starting next year, the province will introduce a tax on profits generated from the sale of residential properties sold within two years of purchase.
This “home-flipping tax” is structured to impose a 20% levy on profits from sales occurring within the first year and will decrease to zero by the end of the second year. It will also be applicable to assignment contracts.
Furthermore, certain exemptions will be available for sellers facing life changes such as divorce, death, or disability, as well as for those contributing to the housing supply through construction and development activities.
The government said the tax is expected to generate $43 million in revenue in its first full year of implementation, with proceeds going toward increasing the supply of affordable housing in the province.
Tax breaks for first-time buyers, rental developers
The BC government’s 2024 budget has also introduced tax breaks for first-time homebuyers and developers of rental housing.
Effective April 1, 2024, the exemption threshold for the property transfer tax for first-time buyers will increase from $500,000 to $835,000, with properties priced under $500,000 being fully exempt.
Additionally, the threshold for newly constructed homes eligible for a property transfer tax exemption will rise to $1.1 million from $750,000.
New homes priced below $1.1 million will also qualify for the property transfer tax exemption, raising the current threshold of $750,000.
Furthermore, the province will introduce a property transfer tax exemption for the acquisition of new, qualified rental buildings from 2025 to 2030. This will target non-stratified buildings maintained as rentals for at least a decade with a minimum of four apartments.
Housing is a “generational challenge”
The government had hinted at plans to increase housing supply for first-time buyers during its speech from the throne earlier this week.
The speech, read by lieutenant-governor Janet Austin, referred to BC’s housing crunch as a “generational challenge” that the government is determined to address.
Austin also shared details about the BC Builds program, she said is the “next step” to the government’s Homes for People plan.
In the 2024 budget, the government said BC Builds will receive $198 million over a period of three years to expedite rental housing projects on government-owned land. The funding includes $50 million for operating expenses and $14 million for capital costs in 2024, aiming to reduce construction timelines to 12-18 months.
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