What is property flipping?
Property flipping is when individuals, including real estate agents, buy and resell homes in a short period of time for a profit. This also includes buying and selling a property before its official sale or construction—a process called an “assignment sale” but sometimes also referred to as “shadow flipping”.
Know your tax obligations:
- The profits you make from flipping real estate are generally considered to be fully taxable as business income.
- The principal residence exemption does not apply to property flipping.
- These transactions may also be subject to GST/HST which you would be responsible for remitting to the CRA.