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Flipping Tax - Short term rentals

April 15, 2024

Nice to hear, Bank of Canada holds its key interest rate at 5%

Here are recent updates on changes in the market regarding Short Term Rentals and the introduction to the new legislation on Flipping Tax


After months of advocacy from the Association of Interior REALTORS® and other stakeholders across the province, the provincial government announced their intent to clarify the rules around the short-term rental of strata hotels and motels.

The Housing Ministry announced that they will be expanding exemptions for short term rentals on strata hotels in upcoming regulations. The forthcoming regulations are subject to government approval and expected to come into place sometime this April.

For strata hotel and motel properties providing accommodation before December 8, 2023, the expected regulations will exempt these properties from the principal residence rule if they meet the criteria in one of the two options:


1. Accommodation was being provided in a manner similar to a hotel or motel and on Dec. 8, 2023, the strata hotel or motel had and continues to have all of the following, which are provided in a manner similar to a hotel or motel:

  • a staffed front desk on site;
  • one or more employees or contractors that provide housekeeping services for overnight accommodations; and
  • a platform providing platform services available exclusively for the use of owners offering short-term rentals at the property.

2. Accommodation was being provided in a manner similar to a hotel or motel, and more than one strata lot on the property is not able to be used as a principal residence by anyone due to a restriction under:

  • zoning;
  • a rental management agreement between the manager and an owner of a strata lot; or
  • a restrictive covenant or a covenant under section 219 of the Land Title Act.

For strata hotels and motels operating on or after December, 8, 2023, the regulations are expected to have stricter standards. It is likely these buildings will need to meet all the criteria laid out in option 1 and at least one of the criteria listed in option 2.


Exemptions will apply to all units in the strata hotel or motel. Updates will be provided as the regulations develop as more details are released. 



Provincial government tabled the legislation to enact the provincial flipping tax to go into effect January 1, 2025. The bill contains additional important details and clarifications related to the tax. They have been summarized below:



General Details:

  • The flipping tax will apply to the taxable income on a property sold within 730 days of ownership. If the property is sold within 1 year the tax will be the full 20%, from 366 -729 days the tax will decrease on a pro-rated basis to zero.  
  • The tax applies to housing units, bare properties zoned for residential use and assignment sales or purchase contracts.
  • The tax does not apply to property on First Nations Land .
  • Properties purchased in 2023 and 2024 will be subject to the tax retroactively if sold within 730 days after January 1, 2025.
  • The provincial flipping tax is separate and in addition to the federally administered anti-flipping rule.



Pre-sales and Assignments:

  • For the purpose of the tax, people who have acquired a pre-sale contract will be considered to have acquired the property on the day they entered the contract.
  • If you are assigned a pre-sale contract and close on the property, the date you were assigned the contract is considered the acquisition date for the purpose of the tax.
  • Any profit gained from assigning a pre-sale contract will be subject to the flipping tax.




  • Exemptions for life circumstance such as death, divorce, illness, relocation for work, insolvency, etc. will be available.
  • Exemptions for builders will be available such as if a housing unit is added to an existing property or property is purchased for the purpose of constructing buildings.
  • Exemptions for certain entities such as registered charities, government, etc. are available.

The full list of exemptions and details can be found here



Primary Residence Deduction:

  • Individuals who sell a primary residence within 730 days of ownership will be able to claim a deduction of $20,000 from their taxable interest if the property was their primary residence and they lived in it for at least 365 consecutive days before selling it.