The August 9, 2022 draft amendments to the Income Tax
Act (Canada) include provisions to give effect to the
residential property flipping rule first introduced in Budget 2022.
If enacted as proposed, starting on January 1, 2023, subject to
certain exceptions, profits arising from dispositions of
residential property that was owned for less than 365 days will be
deemed to be business income.
The 2022 Fall Economic Statement released earlier this month
proposes to extend this new deeming rule to profits arising from
the disposition of the rights to purchase a residential property
via an assignment sale. Profits arising from an assignment sale
would be deemed to be business income if the rights to purchase a
property were assigned after having been owned for less than 365
days.
