2023 Residential Property Flipping Rule Change

A new rule introduced in 2022 addresses the rising residential property prices due to speculation. Sales of residential properties after January 1, 2023, that don’t meet the 12-month holding period requirement are fully taxed. There’s no principal residence exemption for these sales, and they don’t receive the half-inclusion treatment of capital gains. This rule also applies to assignment sales. However, properties held for more than 12 months or those meeting specific criteria still follow the general capital gains vs. business income rules.