The Canadian government has recently taken aim at house-flipping in hopes of cooling housing prices. By introducing an anti-flipping tax, Ottawa hopes to slow rapid resale activity and create more room in the market for everyday buyers. Still, under the right conditions, flipping can be a smart investment strategy and a way to build wealth. The key is knowing how to approach it thoughtfully—and with a solid plan.
Here are some helpful things to consider if you’re thinking about getting into the world of house-flipping.
A Beginner’s Guide to Flipping a House
Run the Numbers Carefully
Flipping isn’t just about buying low and selling high. There are many financial pieces to account for beyond the purchase price. Renovation costs, materials, labour, carrying costs (mortgage, utilities, taxes, and insurance), closing costs, and selling expenses all need to fit comfortably within your budget.
Ask yourself:
Does the home require major renovations?
Is the scope realistic for your skill level and timeline?
Do you have a financial buffer if something unexpected comes up?
You’ll also want to understand the tax implications. In Canada, selling a flipped property is treated as business income—not capital gains—and the principal residence exemption doesn’t apply. GST/HST may also come into play. It’s worth talking with an accountant so you’re clear on how your profits will be taxed.
Choose the Right Location
Location still matters—maybe more than ever. Look for areas where renovated homes are in demand and supply is limited. Access to schools, parks, transportation, and everyday amenities plays a major role in buyer appeal.
A “great deal” in a location buyers avoid can quickly become a costly lesson. A solid neighbourhood, even if the purchase price is higher, will typically offer more reliable resale potential.
Manage Your Timeline
Time is money with flipping. The longer a project takes, the more you’ll spend on carrying costs. Before committing, consider whether the renovation timeline is realistic. If the scope looks overwhelming or could drag on, it may be wise to walk away and wait for a better opportunity.
Work with Reliable Professionals
The right contractor team can make or break a flip. Quality work, completed on schedule, directly impacts your bottom line. Ask for references, view previous projects, and make sure everything is in writing. Cutting corners on labour often ends up costing more than it saves.
Permits Matter
If you’re making structural changes, additions, or altering major systems (like plumbing or electrical), permits are typically required. Build time into your schedule for approvals. Working without permits can lead to expensive fixes, delays, or required removals—and buyers today are very savvy about checking.
Know Who You’re Renovating For
Before swinging a hammer, think about who your future buyer will be. Young families? Investors? Retirees? This helps determine things like layout decisions, finishes, and pricing strategy.
Different buyers value different features. For example, a family might prioritize yard space and school zones, while downsizers might focus on one-level living and low maintenance.
Understand the Tax Rules
When you sell, the profit from a flip is typically taxed as business income and must be reported to the CRA. If you repeatedly buy and sell homes, even without major renovations, CRA may still consider it business activity. Understanding how this works ahead of time can prevent surprises.
If you’re considering a flip or wondering whether a property has real potential, we’re always happy to walk through the numbers, help evaluate neighbourhoods, and connect you with reliable contractors and local experts.
We're local REALTORS® in Kingston and area, and we work regularly with investors—from first-time flippers to seasoned renovators.