A serial property flipper in British Columbia, Balkar Bhullar, has been convicted of tax evasion, leading to a hefty penalty. The Canada Revenue Agency (CRA) reports that Bhullar failed to report nearly $7.5 million in earnings and has been fined approximately $2.15 million.
Table of Contents
Conditional Sentence and Significant Fine
On December 19, Bhullar was sentenced to a conditional term of two years less a day, along with the fine, which matches the amount of unpaid federal income tax. The CRA states that Bhullar pleaded guilty to one count of tax evasion on August 3, 2023.
The undeclared income stems from assignment fees on 14 properties transferred between 2011 and 2014. Assignment fees refer to payments for transferring the rights and obligations of a real estate contract from one buyer to another.
CRA’s Efforts to Address Real Estate Tax Evasion
The CRA has highlighted its ongoing efforts to tackle tax cheating within the real estate sector. According to a statement, the agency has made “significant progress” in uncovering cases of tax evasion related to property flipping.
New Home-Flipping Tax Comes into Effect in B.C.
Starting January 1, 2024, a new home-flipping tax will apply in British Columbia. This tax, up to 20%, targets homeowners who sell properties within two years of purchase.
The Ministry of Finance estimates that around 4,000 properties will be affected by this tax in 2025. Revenue collected will support housing programs to address affordability and availability.
Government’s Perspective on the Home-Flipping Tax
B.C.’s Finance Minister, Brenda Bailey, emphasizes that the tax aims to discourage speculative property investments and increase housing affordability for buyers and renters. Bailey notes, “Measures like the home-flipping tax are vital for ensuring more affordable homes for British Columbians.”
CRA 2025 Updates: 5 Key Tax Changes That Will Impact Canadians
5 New CRA Benefit Payments Launching in January 2025
CRA Mileage Rates 2025: Everything You Need to Know for Business Driving and Tax Claims
New CRA Tax Brackets for 2025: Changes and Updates
CRA Announces New Financial Limits for 2025: TFSA, ALDA, and Retirement Contributions
Real Estate Sector Voices Concerns
Despite its objectives, the home-flipping tax has faced criticism from the BC Real Estate Association. The association warns of potential unintended consequences, such as sellers delaying listings, which could tighten market conditions and further reduce housing supply.
Leave a Reply