Flipping Properties

25 November 2015
Remax-Condos-Plus

This week we want to talk about flipping properties. Flipping properties happens when you buy a property and sell it before you actually take title or own the property. This activity is not illegal but it is not a practice that we would recommend. In the pre-construction condo market, an investor may buy a condo on the first day of sales. Four years later the project is finished, the property has gone up in value and the buyer wants to bail before closing to save on land transfer taxes and having to get a mortgage. It sounds simple. However, a sale like this will attract plenty of taxes too. This isn’t the capital gains, but a straight income tax deal. The sale will also be treated as a commercial sale with HST, not a resale or residential sale which is HST exempt.

So, flippers beware! Talk to a tax accountant first before you do anything.