A serial property flipper in British Columbia has been convicted of tax evasion and fined more than $2 million for failing to report nearly $7.5 million in earnings.
The Canada Revenue Agency says in a statement that Balkar Bhullar of Richmond, B.C., was given a conditional sentence of two years less a day on Dec. 19 and fined about $2.15 million, matching the amount of unpaid federal income tax.
The agency says Bhullar pleaded guilty on Aug. 3 last year to one count of tax evasion, relating to undeclared income of about $7.49 million from transferring assignment fees on 14 properties from 2011 to 2014.
Assignment fees are paid for the right to purchase a property, in which a contract’s rights and obligations are transferred from one buyer to another.
The CRA says in a statement that it has made “significant progress” uncovering and addressing tax cheating in the real estate sector.
A new home flipping tax will come into effect in B.C. on Jan. 1, with the tax of up to 20 percent applying to homeowners who sell properties within two years of buying.
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A statement from the Ministry of Finance says it’s estimated about 4,000 properties will be subject to the tax in 2025 and all revenue collected from the tax will go toward housing programs.
B.C.’s Finance Minister Brenda Bailey says in the statement that measures like the home-flipping tax aim to ensure there are more affordable homes for buyers and renters and discourage speculative investors from buying houses for a quick profit.
The B.C. Real Estate Association has criticized the tax, saying there is a “significant risk” it will cause sellers to delay listing their homes, lowering resale housing supply and tightening market conditions.
