Premier David Eby has been clear that speculators are in his crosshairs, and with the 2024 budget his government has announced details of a new 'BC Home Flipping Tax.'
This seems like a potential minefield of unintended consequences. Flipping might contribute to higher house prices, but flipping usually is done by flippers looking to repair run down houses to sell at more or less market prices. If they can’t afford to do that, won’t it mean less avenues for those wanting to get out of a mess? Or even flippers turning landlords long enough to avoid the tax? Am I missing something?
It should convert to lower prices overall because the market inventory wont be snapped up by flippers trying to turn a quick profit. Leaving more choices on the market
flipping usually is done by flippers looking to repair run down houses
This isn’t really the case. Yes, a lot of it may be on really run-down houses that are upgraded to decent or nice, it’s actually pretty common for flips to be cheap and decent houses turned into top-of-the-line. Flipping almost always prices out lower/middle class incomes.
More importantly, it will eliminate the requirement for every goddamn house on the market to go for a full-cash offer.
Really run-down houses will have lots of room for profit as they buy them for cheap and invest in renovating them. Taking 20% off the top just alters the economics of it, and leaves it for someone who would buy the house to repair/renovate it so they can live in it.
I would love to buy a run down property and repair it myself to live in, but they are all unaffordable because the owners know flippers will buy it for 50% markup and then repair it and sell for another 50% profit to someone who doesnt have the skills to repair it themselves.
This seems like a potential minefield of unintended consequences. Flipping might contribute to higher house prices, but flipping usually is done by flippers looking to repair run down houses to sell at more or less market prices. If they can’t afford to do that, won’t it mean less avenues for those wanting to get out of a mess? Or even flippers turning landlords long enough to avoid the tax? Am I missing something?
It should convert to lower prices overall because the market inventory wont be snapped up by flippers trying to turn a quick profit. Leaving more choices on the market
This isn’t really the case. Yes, a lot of it may be on really run-down houses that are upgraded to decent or nice, it’s actually pretty common for flips to be cheap and decent houses turned into top-of-the-line. Flipping almost always prices out lower/middle class incomes.
More importantly, it will eliminate the requirement for every goddamn house on the market to go for a full-cash offer.
Really run-down houses will have lots of room for profit as they buy them for cheap and invest in renovating them. Taking 20% off the top just alters the economics of it, and leaves it for someone who would buy the house to repair/renovate it so they can live in it.
I would love to buy a run down property and repair it myself to live in, but they are all unaffordable because the owners know flippers will buy it for 50% markup and then repair it and sell for another 50% profit to someone who doesnt have the skills to repair it themselves.