Don’t “Test the Market” in Greater Victoria: Lead It.

In today’s Greater Victoria real estate market, pricing your home too high to “see what happens” can actually cost you time and money. With more inventory available and buyers taking a more measured approach, the first 2–3 weeks your home is listed are critical.

That’s when your property gets the most attention - new listings alerts, agent tours, and serious buyers actively watching the market.

If your home is priced too high out of the gate, you risk:

• Fewer showings

• Sitting on the market longer than competing listings

• Consistent price reductions that signal weakness to buyers

Instead, positioning your home at a price based on recent comparable sales will: 

• Attract more interest early

• Create a sense of urgency

• Potentially generate stronger offers

In a balanced market like Greater Victoria, the best strategy isn’t chasing the market - it’s aligning with it from day one. 

If you are thinking of selling your home in Greater Victoria and surrounding areas, let’s chat about the value of your home, comparables in the area, and the current state of the real estate market. 

 The Anti-Flipping Rule 

In August of 2022, the Federal Government published a draft legislation that introduced the new anti-flipping rule which ensures that any profit earned from a flipped property will be fully taxable. Flipping a property refers to the act of purchasing real estate property with the intent to resell it with in a short period of time with a view to earning a profit.

The current law in relation to the sales of real estate is as follows:

• Principal Residence Exemption in Canada, if you are selling your primary home residence, the gain on the property is non-taxable. To be considered a primary residence, you, your spouse, and/or your children must be physically living in the property for at least part of the year.

• Capital Gain Tax, if you are selling your secondary property or a property that is not your principal residence (such as a cottage or rental property), the profits you realize will be taxed as capital gains. This means that only 50% of the gain your realized will be subject to tax and the remaining 50% will be tax-free. 

The New Residential Property Flipping rule will change this dynamic. Under this law, if you sell real estate that you have owned for less than 12 consecutive months, you will be deemed to have flipped the property. As a result, any profits earned will be 100% taxable as business income, even if the property is your principal residence. Since the government believes that flipping a property is a business activity and should be treated just like any other business venture, the profits will not be subject to the preferential 50% capital gain tax.

This rule came into effect on January 01, 2023 and will apply to any residential real estate sold on or after this date.

Are There Any Exemptions ?

Fortunately, the Federal government carved out some exemptions for extraordinary life events which include the following:

• Death

• Breakdown of marriage

• Birth of a child

• Serious disability of illness

• Relocation of work

• Bankruptcy or insolvency

In these situations, the profit from the sale of the home will not automatically be deemed to be business income. However, despite meeting an exemption or owning a property for over 12-month period, the question of whether the property will be taxed as business income will remain a question fact determined by the CRA. Thus, a home owner can still be subject to CRA audit and liable for the 100% taxable agin even though they meet an exemption or the time period.