In recent years, many real estate investors have relied on house flipping – buying a property, renovating it, and selling quickly for a profit – as a way to generate cash. But market conditions are changing, and with new policies in British Columbia targeting short-term sales, flipping is becoming less attractive for many.
Slower Markets and Higher Risks
In a slower real estate market, properties can sit unsold for weeks or even months. The longer a renovated property remains on the market, the more it costs in interest, utilities, taxes, and maintenance. If property buyers are cautious and fewer offers come in, profit margins can disappear or even turn into losses.
For BC landlords and investors, this makes accurate pricing and realistic renovation budgets more important than ever.
BC’s New Home-Flipping Tax
As of January 1, 2025, British Columbia introduced a home-flipping tax under the Residential Property (Short-Term Holding) Profit Tax Act. This tax applies to the profit earned from selling a residential property in BC that was owned for less than 730 days (about two years).
Key points:
-
Up to 20% tax on profit: If a property is sold within one year, the tax rate on profit can be as high as 20%, and it declines on a sliding scale up to the two-year mark.
-
Applies to both residents and non-residents: The tax applies regardless of where the seller lives.
-
Separate from federal rules: This is in addition to any federal property flipping provisions.
-
Property sales that qualify for exemptions (such as primary residence rules or other specific exceptions) may reduce or avoid the tax.
This tax was introduced to discourage short-term property speculation and help stabilize the housing market, and it adds another cost layer for investors who buy with a quick resale in mind.
Why BRRRR Is Gaining Appeal
Given the added challenges of longer market times and a flipping tax, many investors are turning toward the BRRRR strategy:
-
Buy at a below-market price
-
Rehab strategically to add value
-
Rent the property to generate steady income
-
Refinance based on the improved value
-
Repeat the process with new acquisitions
BRRRR has predictable cash flow and long-term growth potential, making it well-suited for environments where resale isn’t a sure bet. Unlike flipping, where profit depends on finding the right buyer at the right time, BRRRR focuses first on stabilizing the asset with tenants and second on refinancing when justified by the property’s increased value.
The Long-Term View for BC Investors
BRRRR won’t typically deliver an immediate payout like a successful flip can, but it aligns with the realities of slower markets and policy changes such as the BC flipping tax. Owning rental property allows investors to benefit from rental income, gradual appreciation, and the ability to weather short-term market fluctuations.
For landlords and investors in British Columbia, this long-term, tenant-focused strategy may offer a more stable path forward than relying on short-term property sales — especially given the tax penalties for quick turnovers.
