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Gondaliya CPA

Corporate Tax Filing Experts

Tax Accountant for House Flippers in Ontario and Across Canada

We get your flip taxed correctly as business income, handle the 12-month property flipping rule and the HST on substantially renovated homes, account for each flip as inventory, and structure your flipping corporation to capture the small business deduction. Whether you run fix-and-flip renovations, pre-construction assignments, a BRRRR or wholesale strategy, or condo flips, we handle the project bookkeeping, the HST and the New Housing Rebate, keep you onside the flipping rule and the business-versus-capital line, and structure the corporation, financing and exit of your flipping business — with AFFORDABLE flat fees.

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AFFORDABLE House Flipper Tax Accountant

House flipping is taxed nothing like buying a home to live in. The residential property flipping rule makes any short hold fully taxable business income, CRA audits real estate harder than almost any sector, and a missed HST self-assessment on a substantially renovated flip is a costly surprise at closing. That is why you need a house flippers accountant in Ontario who knows the file. At Gondaliya CPA, we specialize in flip project accounting and corporate tax planning for house flippers, accounting for each flip as inventory, handling the 12-month flipping rule and the HST, and structuring your flipping corporation to capture the small business deduction — AFFORDABLE flat-fee support that keeps you CRA-compliant and stops you paying more tax than you owe.

As a real estate flipping accountant, we work with fix-and-flip renovators, pre-construction assignment flippers, BRRRR and wholesale investors, and condo flippers across Ontario, with support on every project rather than a once-a-year scramble. We tell you plainly what you can capitalize, what you can deduct, and where the real gross profit sits on each flip.

Let us handle the numbers so you can focus on the work that actually pays you.

Gondaliya CPA team - accounting and tax services for house flippers

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Accounting That Understands How House Flipping Is Actually Taxed

House flipping is taxed nothing like buying a home, and the rules changed hard against flippers. A short hold is fully taxable business income, CRA audits real estate harder than almost any sector, a substantial renovation turns your sale into a taxable supply, and every flip is inventory rather than capital property. At Gondaliya CPA, we understand how house flipping is actually taxed and provide practical, flip-focused solutions across the GTA and all of Ontario.

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The 12-Month Flipping Rule

A residential property held under 365 days is deemed fully taxable business income, with no principal residence exemption.

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Business Income, Not Capital Gains

CRA usually taxes flips at 100% as an adventure in the nature of trade, not at the 50% capital gains rate.

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HST on Renovated Homes

A substantially renovated or newly built flip is a taxable sale, and missing the HST self-assessment is expensive.

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Inventory & Project Costs

Each flip is inventory, so there is no CCA and every renovation and carrying cost must be capitalized and matched to the sale.

Stay Compliant and Minimize Your House Flipper Tax

For a house flipper, staying onside with CRA and paying the least legal tax are the same job. We keep every filing on schedule while capitalizing every cost the flip allows and claiming the small business deduction, so nothing is missed and nothing invites a reassessment.

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Income Characterization & the Flipping Rule

The residential property flipping rule in ITA 12(13) and 12(14) deems any flip held under 365 consecutive days to be fully taxable business income, with no principal residence exemption and only narrow life-event exceptions. Even past 365 days, CRA usually treats a flip as an adventure in the nature of trade taxed at 100%, not a capital gain at 50%. We report your flips correctly as business income, keep any principal-residence claim defensible, and document the business-versus-capital position so a wrong characterization never invites a reassessment and penalties.

HST Obligations for House Flippers

A newly built or substantially renovated flip — 90% or more of the interior redone — is a taxable supply, so you must charge or self-assess the 13% HST on the sale, while the GST524 New Housing Rebate may offset part of it. Pre-construction assignment sales have been taxable since May 2022. We register you once taxable revenue passes $30,000, file every GST/HST return, claim the rebate, and match the HST to your income so CRA’s matching program finds nothing to reassess.

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Year-End Deliverables for House Flippers

At year-end, a flipping business needs inventory-based financial statements, a project cost ledger for each property, and a T2 with GIFI that ties to your HST returns, because a flip is inventory under ITA 10, never capital property, and every renovation and carrying cost is capitalized and matched to the sale. Where a hard-money lender or joint-venture partner is involved, you also need CPA-compiled statements. Our team prepares every deliverable on time and in compliance, so your file is audit-ready and financing-ready.

Accounting & Tax Experts for House Flippers

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Why Choose Our Accounting Services for House Flippers?

1
🎯

Tax Planning — Flipping & Structure Expertise

We know the file: flips taxed as business income at 100%, the section 125 small business deduction at 12.2% on the first $500,000, the flipping corporation and the section 85 rollover. We structure your flips as active income and plan financing and timing around each project.

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Consulting — Project & Inventory Bookkeeping

Our bookkeeping is built per flip. We capitalize renovation material costs, contractor costs and carrying-cost interest to property inventory, track the 13% HST, and report the true gross profit per flip in QuickBooks Online or Buildertrend.

3
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CRA Representation — Real Estate Audit Defence

When CRA questions a principal-residence claim on a flip, unreported HST on a substantial renovation, or whether a sale is business or capital, we prepare the response, defend the ITA 12(13) and business-versus-capital positions, and pursue relief on Form RC4288.

4
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Bookkeeping — Financing, Growth & Exit

We handle hard-money and project financing, prepare the CPA statements a lender or joint-venture partner requires, scale your bookkeeping as you add flips, and plan the disposition and exit of your flipping business.

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House Flipper Tax and Accounting Services in Ontario

📄

Corporate Tax Filing for House Flippers

Professional T2 preparation with each flip reported as business income under section 9, inventory not CCA, and CRA compliance on every line.

💳

Accounting & Bookkeeping for House Flippers

Per-flip project bookkeeping with inventory costing, financial statements, HST tracking, and monthly reporting built for a flipping business.

📈

Corporate Tax Planning for House Flippers

Smart tax planning to structure flips as active business income, capture the $500,000 small business deduction, and plan the section 85 rollover.

Catch-Up Corporate Tax Filing for House Flippers

File overdue T2 and HST years across past flips, rebuild project costs and proceeds, and get back into CRA compliance.

🧾

GST/HST Filing for House Flippers

AFFORDABLE HST self-assessment on substantially renovated and new flips, the GST524 New Housing Rebate, and assignment-sale HST.

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Corporate Tax Cleanup for House Flippers

Restate flips wrongly reported as capital gains or principal residence to business income, correct the HST, and rebuild inventory on an amended T2.

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CRA Audit Resolution Services for House Flippers

Expert support for flipping-rule and principal-residence audits, unreported-HST reviews, and business-versus-capital disputes.

📊

CPA Compilation Report (Notice to Reader) for House Flippers

CPA-compiled financial statements that hard-money lenders, project financiers and joint-venture partners accept.

🏢

Incorporation Services for House Flippers

Full incorporation including NUANS, articles, share structure, and the section 85 rollover of a property into the flipping corporation.

📒

Catch-Up Bookkeeping Services for House Flippers

Rebuild per-property ledgers across unfiled years, capitalizing acquisition, renovation and carrying costs to each flip so back-year returns are filed on real numbers.

🌐

US Corporation & LLC Tax Filing for House Flippers

Form 1120, treaty-based 1120-F and Form 5472 for flippers with US entities or cross-border property, including LLC hybrid mismatches and foreign tax credit relief.

📜

Voluntary Disclosure Program for House Flippers

Form RC199 disclosures for unreported flip dispositions and unremitted HST on substantially renovated sales, filed on the general track wherever the conditions are met.

Accounting & Tax Services Tailored for House Flippers

Real, practitioner-level CPA expertise for fix-and-flip renovators, pre-construction assignment flippers, BRRRR and wholesale investors, and condo flippers across Ontario — built for how a house flipping business actually runs.

  • We prepare the T2 for your flipping corporation reporting each sale as business income under section 9, not a capital gain, so 100% of your flip sale proceeds is included and CRA’s real estate audit program finds a return that already matches how flips are taxed.
  • We carry every flip as property inventory under ITA 10, never capital property, so no CCA is claimed and each purchase and closing cost is capitalized and matched to the sale under section 9, keeping your gross profit per flip taxed at the corporation’s 12.2% small business rate rather than distorted by a CCA claim CRA would deny.
  • We apply the residential property flipping rule in ITA 12(13) and 12(14) on the T2, treating any flip held under 365 days as fully taxable business income with no principal residence exemption, so 100% of the gain is reported and CRA cannot reassess a wrongful capital-gains claim.
  • We map your assignment fee income, renovation costs and each recovery to the correct GIFI lines on the T2, so your flipping corporation’s return ties to the HST filings and CRA’s matching program finds nothing to reassess above the $30,000 line.
  • We file the T2 within six months of your flipping corporation’s year-end and claim the section 125 small business deduction on active flipping income up to $500,000, so the first half-million of profit is taxed at 12.2% and no late-filing exposure arises with CRA.
  • We set up per-flip project costing in QuickBooks Online or Buildertrend, capitalizing renovation material costs and contractor costs to property inventory rather than expensing them, so each flip’s cost base is complete and CRA cannot deny deductions at the 13% HST review.
  • We track carrying-cost interest, property tax carrying cost and utilities during renovation in Sage 50 across the hold period, capitalizing them to inventory under section 9, so your gross profit per flip is accurate to the dollar and the 13% HST on materials is captured as it is paid.
  • We reconcile renovation labour and staging costs in Xero and capture every receipt through Dext, holding the six years of records CRA requires under the Income Tax Act, so a $50,000 renovation budget is fully documented and no cost is lost at year-end.
  • We build your flip chart of accounts in FlipperForce mapped to the T2 inventory and 13% HST lines, tracking realtor commission and legal fees against each property, so a condo flipper’s books tie to the return and CRA’s matching program has nothing to flag.
  • We run any renovation crew payroll through Wagepoint, remit source deductions to CRA, and separate personal draws from flip sale proceeds, so commingled funds never invite a review that expands into your whole $500,000 of flipping income.
  • We structure your flipping corporation so its profit is active business income, not property income, capturing the section 125 small business deduction at 12.2% on the first $500,000 of gross profit per flip, because a flipping business is an adventure in the nature of trade the CRA accepts as active.
  • We complete a section 85 rollover on Form T2057 to move a property you hold personally into the flipping corporation at an elected amount, deferring the business income a straight sale of that property inventory would trigger, so incorporating mid-project on a $600,000 flip creates no immediate CRA liability.
  • We time the disposition of each flip across your corporation’s fiscal year so gross profit is not bunched above $500,000 in one year, keeping every dollar at the 12.2% small business rate instead of the general rate CRA applies once the deduction is ground down.
  • We plan hard-money loan interest and project financing so carrying-cost interest is deductible against 100% business income under section 9, and model whether holding past 365 days ever beats the flipping rule, because CRA treats most flips as business income regardless of hold.
  • We set the salary-and-dividend mix from your flipping corporation and use RRSP room to pull income below the next bracket, because a flipper leaving $500,000 of gross profit in the company under section 125 still pays 12.2% and planning the draw avoids a surprise personal bill from CRA.
  • We file every unfiled T2 for your flipping corporation, reconstructing flip sale proceeds and project costs from bank deposits, purchase and sale documents and renovation invoices, so CRA cannot arbitrarily assess your past flips at 100% with no cost base.
  • Late filing costs the 5% plus 1% per month late-filing penalty on the T2 balance owing up to twelve months, so we file your oldest unfiled flip year first to stop the penalty compounding and cap the arrears interest CRA charges.
  • We reconstruct the property inventory and carrying costs across each unfiled year under ITA 10 so capitalized renovation material costs and contractor costs are matched to the sale, because a catch-up filing that reports flip proceeds and ignores cost base hands CRA far more than the 12.2% you owe.
  • We file the unfiled HST returns alongside the T2 years, self-assessing the 13% HST on any substantially renovated flip and claiming the GST524 rebate, so CRA does not layer HST arrears on top of the income tax for your catch-up filing.
  • We file an RC4288 taxpayer relief request to cancel penalties and interest where illness, a prior bookkeeper’s error or genuine hardship applies, covering the ten years CRA allows and saving your flipping corporation real money on accumulated arrears above the 5% penalty.
  • A newly built or substantially renovated flip — 90% or more of the interior redone — is a taxable supply, so we self-assess the 13% HST on the sale and report it, because CRA reassesses unreported HST on renovated homes faster than almost any flip error.
  • We file the GST524 New Housing Rebate on your substantially renovated flip, recovering part of the 13% HST charged on the sale proceeds, because a flipper who charges HST but misses the rebate leaves real money with CRA on every project.
  • You must register once taxable revenue passes the $30,000 threshold across four quarters, and we track the exact quarter your flipping activity crosses it on assignment fee income and flip sale proceeds, so CRA cannot assess back-HST where you never charged 13% on a taxable flip.
  • Pre-construction assignment sales have been taxable since May 2022, so we charge and remit 13% HST on your assignment fee income and report it, because CRA treats an unreported assignment flip as one of its top real estate audit targets.
  • We reconcile the 13% HST on your GST/HST returns to the flip sale proceeds on your T2, because CRA’s matching program compares the two and a house flipper whose HST and income figures disagree is among the fastest files selected for audit.
  • We file an amended T2 to restate a flip a prior preparer reported as a capital gain, moving it to 100% business income under section 9, because CRA denies capital-gains treatment on a flip and would reassess the missing half with penalties.
  • We restate a wrongful principal residence exemption claimed on a flip held under 365 days, reporting it as business income under the flipping rule in ITA 12(13), before CRA does it and adds the gross-negligence penalty of 50%.
  • We rebuild the property inventory a prior bookkeeper never tracked, capitalizing renovation labour, permit fees and land transfer tax to each flip’s cost base, so your amended T2 shows the true gross profit per flip at 12.2% and CRA cannot tax the proceeds gross.
  • We correct the HST where a substantially renovated flip was sold without self-assessing the 13% HST, filing the adjustment and the GST524 rebate before the four-year window closes so CRA does not add arrears interest to the amended return.
  • We reclassify capital improvements and staging a prior return expensed against the wrong year, matching them to the flip they belong to under ITA 10 inventory, because a single misallocated cost during a CRA review often reopens three prior flip years and the 5% penalty.
  • When CRA opens a real estate audit on your flip, we answer the ITA 12(13) flipping-rule and principal-residence questions within the 30-day deadline, defending the 100% business-income position, so one flip year does not expand into a reassessment of three.
  • Where CRA reviews unreported HST on a substantially renovated flip, we reconcile the 13% HST to the sale and defend the GST524 rebate, so your house flipping corporation’s HST position holds and no arrears or penalty is assessed.
  • Where CRA disputes whether a longer-held property was a flip or an investment, we build the business-versus-capital argument on intention, frequency and financing over the flip sale proceeds, so CRA cannot impose the 100% inclusion by default.
  • We file the Notice of Objection within 90 days of a CRA reassessment on your flip and pursue relief on Form RC4288 where a prior accountant’s error caused the 5% plus 1% penalties, protecting your right to the Tax Court and the interest your flipping corporation should not carry.
  • We answer CRA indirect-verification reviews of a cash-heavy flipping business with a source-and-application-of-funds reconciliation, matching deposits to flip sale proceeds, so unreported income is not assumed and the 50% gross-negligence penalty is avoided.
  • We prepare CSRS 4200 compilation engagement financial statements for your flipping corporation, which hard-money lenders require across two fiscal years and tie to the T2 filed with CRA, before they release project financing on a $500,000 flip acquisition showing your gross profit per flip.
  • Your compiled statement of financial position shows property inventory at cost, hard-money loan interest and owner’s capital, tying to two years of T2 filings CRA holds, so a lender sees the 12.2%-taxed profit and approves financing on your flip faster.
  • We compile the statement of operations with flip sale proceeds, cost of property sold and gross profit per flip classified consistently across two fiscal years on $500,000 of proceeds and tied to the T2 filed with CRA, so a hard-money lender or joint-venture partner sees a stable margin, not reclassified noise.
  • For a joint-venture partner funding your flips, we present each project’s contractor costs, realtor commission and gross profit so the partner can see the return, tying the compiled statements to the T2 and the 13% HST returns CRA holds.
  • The CSRS 4200 report from your CPA discloses that no audit or review was performed and ties to the T2 CRA holds, delivered within 30 days so a hard-money lender’s conditional approval on a $400,000 flip is not lost.
  • We incorporate your flipping business under the Ontario Business Corporations Act with a NUANS search and articles, so retained flip profit is taxed at the 12.2% active-business rate on the first $500,000 under the section 125 small business deduction rather than your personal rate, and CRA accepts the structure.
  • We complete the section 85 rollover on Form T2057 to move a property you already hold into the new flipping corporation at an elected amount, deferring the 100% business income a straight transfer of that property inventory would trigger with CRA.
  • We register the corporation’s CRA Business Number, 13% HST account and payroll account, and close your personal flip accounts, so your flipping corporation never remits the same flip sale proceeds twice or triggers a first-return penalty with CRA.
  • Where you flip as a sole proprietor on a T2125, we model whether incorporating saves tax, weighing your personal rate against the corporate 12.2% on the first $500,000 of flipping income, so you pick the structure CRA and the numbers support.
  • We set the opening balance sheet, minute book, share classes and first fiscal year-end up to 53 weeks out, so dividends can later be split, the section 125 deduction on the first $500,000 is preserved, and the first T2 and CRA balance-due date are deferred.
  • We rebuild a separate project ledger for every property you flipped in the unfiled years, posting the purchase price, land transfer tax and the lawyer’s statement of adjustments to that property’s inventory cost base under ITA 10 rather than a single lump expense account.
  • We sort years of unfiled renovation invoices, permit fees and trade payments back to the property each one belongs to, capitalizing contractor costs and materials to that flip rather than expensing them, so your catch-up books show true gross profit per project.
  • We reconstruct carrying costs across each hold period from lender statements and tax bills, capitalizing hard-money loan interest, property tax and utilities during renovation to the property, so a $480,000 flip carried eleven months is not restated by CRA on proceeds alone.
  • We post each completed sale as business income under section 9 in the year it closed, matching the capitalized cost base against the flip sale proceeds, because a flip is inventory rather than capital property and no CCA belongs in the catch-up books.
  • Once every property is rebuilt, we hand the bookkeeping straight into your overdue back-year returns, with realtor commission and closing legal fees capitalized to each flip and the 13% HST already remitted reconciled, so the filings agree line for line.
  • Where your flipping group owns a US corporation buying and renovating property across the border, we prepare its Form 1120, carrying each US property as inventory and matching renovation and closing costs against the sale in the year it closes.
  • Where your Canadian flipping corporation renovates and sells a single US property without a permanent establishment there, we file a protective, treaty-based Form 1120-F so the US filing obligation is met and the profit stays taxable where the corporation is resident.
  • Every reportable transaction between you and your US flipping entity — renovation funds advanced, a loan for the acquisition, management fees — goes on Form 5472 with the 1120, because a missed or late 5472 carries a $25,000 penalty per form.
  • A US LLC holding your flip is fiscally transparent in the United States but treated as a corporation by CRA, and we manage that hybrid mismatch so the US tax paid on the sale is not stranded outside your Canadian foreign tax credit.
  • Where a US-resident shareholder funds your Ontario flips, or you sell a renovated US property subject to FIRPTA withholding at closing, we coordinate both returns so the same project profit is reported once on each side and never taxed twice.
  • We file Form RC199 for a flipper with unreported property dispositions, setting out each sale, the year it closed and the cost base rebuilt from renovation and carrying records, so CRA sees a complete application rather than a partial admission.
  • Your disclosure must meet all five acceptance conditions — voluntary, complete, involving a penalty or the potential for one, information over a year overdue, and payment of the estimated tax — and we test your flip years against each before filing.
  • Where a flip was left off a return entirely or shown as a capital gain, the disclosure restates it as fully taxable business income with the cost base intact, because CRA does not accept capital-gains treatment on a property bought to renovate and resell.
  • A substantially renovated flip sold without self-assessing the 13% HST goes into the same disclosure, and we quantify the unremitted HST net of the GST524 New Housing Rebate so a $650,000 sale is not disclosed at its gross tax exposure.
  • We argue for the general program, where penalties are waived and partial interest relief applies, rather than the limited track CRA reserves for deliberate conduct, and the difference on a flipper with several unreported sales is substantial.

House Flipper Tax & HST Check

Six quick questions on your flip holding period, income characterization, HST, the New Housing Rebate, inventory accounting and your structure. No fee shown.

1. Are you holding any flips for under 365 days?

2. Are you reporting your flips as business income, not capital gains?

3. Are you self-assessing 13% HST on substantially renovated flips?

4. Are you claiming the GST524 New Housing Rebate where it applies?

5. Are you accounting for each flip as inventory rather than claiming CCA?

6. Are you incorporated to capture the $500,000 small business deduction?

Free CPA Consultation for House Flippers

Case Studies: House Flipper Accounting & Tax

Toronto Fix-and-Flip Corporation — Business-Income Structuring Captured the $500,000 SBD

The problem: A Toronto investor running three fix-and-flip projects a year through a new corporation had a prior preparer reporting the flips as capital gains and was unsure whether the corporation even qualified for the small business deduction, worried CRA would treat the income as a specified investment business. Two years of flip sale proceeds had been taxed inconsistently, and no one had confirmed the flips were active business income.

What we did: We established that a fix-and-flip corporation earns active business income — an adventure in the nature of trade — not property income, restated the flips to 100% business income under section 9 on amended T2 returns, and claimed the section 125 small business deduction so the first $500,000 was taxed at 12.2%.

The result:

  • Captured the $500,000 small business deduction at 12.2%
  • Saved $41,200 in corporate tax across the corrected years
  • Active-business-income position documented for CRA

Mississauga Substantial-Renovation Flip — HST Self-Assessment & New Housing Rebate Fixed, CRA Review Defended

The problem: A Mississauga flipper had gutted and rebuilt a house — well over 90% of the interior — and sold it without charging or self-assessing the 13% HST, unaware that a substantial renovation makes the sale a taxable supply. CRA opened a review of the unreported HST, and no GST524 New Housing Rebate had been claimed to offset the exposure.

What we did: We self-assessed the 13% HST on the substantially renovated flip, filed the GST524 New Housing Rebate to recover part of it, reconciled the renovation material and contractor costs, and answered CRA’s review within the 30-day deadline with the substantial-renovation analysis and supporting invoices.

The result:

  • CRA HST review closed with no penalty
  • GST524 rebate recovered against the HST charged
  • Reassessment and gross-negligence penalty avoided

Ottawa Multi-Flip Investor — Inventory Accounting & Flipping-Rule Compliance Corrected a Capital-Gains Error

The problem: An Ottawa investor flipping four properties a year had claimed the principal residence exemption on one held under 365 days and reported the others as capital gains at the 50% rate, with no inventory accounting — renovation labour, carrying-cost interest and land transfer tax were never capitalized to each flip’s cost base.

What we did: We applied the residential property flipping rule in ITA 12(13), restated every flip to 100% business income, rebuilt each property as inventory under ITA 10 with all renovation, carrying and closing costs capitalized, and amended the T2 years before CRA reassessed.

The result:

  • Wrongful principal-residence and capital-gains treatment corrected
  • Full cost base rebuilt, saving $28,500 in tax on the flips
  • Amended T2 filed ahead of CRA reassessment

Our Simple Process

How We Work With House Flippers

Know Exact Fees within 2 Minutes NOW

Our clear, efficient process ensures every step is transparent, building trust and long-term client relationships.

Here’s a simplified process approach:
Step 1

Kickoff (Document Request)

Collect prior T2 or T1 returns, purchase and sale documents, renovation invoices, carrying-cost records, HST history, and bank statements.

Step 2

First 30 Days (Cleanup & Setup)

Set up QuickBooks Online, Sage 50 or Buildertrend, build per-flip project ledgers and an inventory chart of accounts, and assess your HST and flipping-rule position.

Step 3

Per-Project Close

Per-flip cost capitalization, receipt capture, HST tracking, and gross-profit reconciliation on each sale.

Step 4

Quarterly Planning Review

Business-income structuring, small business deduction planning, HST and rebate review, and financing.

Step 5

Year-End Close & T2 Filing

Trial balance, inventory-based financial statements, T2 with GIFI, and CRA preparation.

Get Your House Flipper Taxes Done Right Today

Transparent Pricing for House Flippers

Affordable Pricing for House Flippers

Know Exact Fees within 2 Minutes NOW

We believe in clear, upfront pricing so you know exactly what to expect. All fees include HST.

  • Tax Preparation (Corporation) — From $400
  • Tax Return Filing (Corporation) — From $400
  • Tax Compliance Audit — FREE CRA audit support for our clients
  • Tax Strategy — FREE for our clients
  • Accounting Base Plan — From $100 per month
  • Bookkeeping Management — Free for our Accounting clients
  • Financial Reporting — Free for our Accounting clients
  • Business Formation — Flat $35
  • Incorporation Process — Flat $35
  • Entity Setup Assistance — Flat $35
  • Full-Service Payroll — From $125 per month

Payment is by Interac e-Transfer to info@gondaliyacpa.ca only. Security question: Not Applicable, as auto-deposit is enabled.

Meet Your Lead House Flipper Accountant

Meet your lead house flipper accountant. As your flipping and real estate tax adviser, you deal with the same two people every year.

Sharad Gondaliya CPA

Sharad Gondaliya, CPA

Principal

Bio

647-212-9559
sharad@gondaliyacpa.ca

Vandana Goel CPA

Vandana Goel, CPA

Accounting Specialist

Bio

647-250-0242
vandana@gondaliyacpa.ca

What Our Clients Say

1300+ five-star reviews from house flippers and real estate investors across Ontario and Canada.

Serving House Flippers Across Ontario

Our CPA team provides specialized accounting and tax solutions for house flippers throughout Ontario. We understand how a fix-and-flip, assignment or BRRRR project is actually taxed, what CRA looks at on a real estate file, and how to keep every flip onside the flipping rule and the HST rules.

Toronto (ON)

55 Queen St E Ste 1205, Toronto, ON M5C 1R6, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Mississauga (ON)

2100 Camilla Rd #716, Mississauga, ON L5A 2J8

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Brampton (ON)

4 Starhill Crescent, Brampton, ON L6R 2P9, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Scarborough (ON)

24 Clementine Square, Scarborough, ON M1G 2V7, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Vaughan (ON)

19 Cabinet Crescent, Woodbridge, ON L4L 6H9, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Oshawa (ON)

210 Durham St, Oshawa, ON L1J 5R3, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Ottawa (ON)

2090 Neepawa Ave a314, Ottawa, ON K2A 3L6, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Etobicoke (ON)

60 Stevenson Rd #1601, Etobicoke, ON M9V 2B4, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Hamilton (ON)

70 Starling Dr, Hamilton, ON L9A 0C5, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Guelph (ON)

1155 Gordon St, Guelph, ON N1L 1S8, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Windsor (ON)

4387 Guppy Ct, Windsor, ON N9G 2N8, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

North York (ON)

150 Graydon Hall Dr #912, North York, ON M3A 3B2, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

House Flipper Accounting & Tax FAQs

Is house flipping business income or capital gains?
For a house flipper, the income is almost always business income, taxed at 100%, not a capital gain taxed at 50%. Since January 1, 2023 the residential property flipping rule in ITA 12(13) and 12(14) deems any residential property or assignment held less than 365 consecutive days to produce business income automatically, with no principal residence exemption. Even beyond 365 days, CRA generally treats a flip as an adventure in the nature of trade based on your intention, frequency and financing, so the full profit is taxable. Capital-gains treatment on a flip is rare, hard to defend, and a wrong claim invites a reassessment with penalties. Only narrow life-event exceptions — death, disability, a new child, a relationship breakdown, a job relocation and a few others — take a short hold outside the rule. We report your flips correctly as business income the first time, capture the cost base and small business deduction, and defend the position if CRA asks.
What is the 12-month property flipping rule?
The residential property flipping rule under ITA 12(13) and 12(14), in force since January 1, 2023, deems any residential property or assignment you hold for fewer than 365 consecutive days to produce fully taxable business income. There is no principal residence exemption and no capital-gains treatment, so 100% of the gain is taxed. Narrow life-event exceptions exist, but they are limited. We confirm which of your holds the rule catches and report them correctly.
Do I pay HST when I flip a house?
Often, yes. A newly built or substantially renovated home is a taxable supply, so the sale attracts 13% HST in Ontario and you must charge or self-assess it. A simple cosmetic flip of an existing used home is usually exempt, but once 90% or more of the interior is renovated, HST applies. Pre-construction assignment sales have been taxable since May 2022. We assess each flip, self-assess the HST where required, and claim the GST524 rebate.
What is a substantial renovation for HST?
A substantial renovation for HST means 90% or more of the interior of an existing home, measured by the removal or replacement of the interior, has been renovated. At that point the property is treated like a newly built home, the sale becomes a taxable supply subject to 13% HST, and the GST524 New Housing Rebate may apply. A renovation short of that threshold generally does not make the sale taxable. We measure the work against the 90% test and document the position for CRA.
Can I claim the principal residence exemption on a flip?
Almost never. If you held the property under 365 days, the flipping rule denies the principal residence exemption outright and deems the profit business income. Even on a longer hold, if CRA sees a pattern of buying, renovating and selling, it treats the property as inventory, not a residence, and the exemption does not apply. A wrongful principal-residence claim on a flip is one of CRA’s top real estate audit targets and carries a gross-negligence penalty of 50%. We keep any legitimate claim defensible and report flips correctly.
Are pre-construction assignment sales taxable?
Yes. Since May 7, 2022, HST applies to the assignment of a pre-construction purchase agreement, so your assignment fee income is subject to 13% HST and you must charge or self-assess it. The flipping rule also treats an assignment held under 365 days as business income, taxed at 100%. Unreported assignment income is a common CRA audit trigger. We report the income and the HST correctly on each assignment.
Should I incorporate my house flipping business?
For a serious flipper, usually yes. A flipping corporation earns active business income and qualifies for the section 125 small business deduction, so the first $500,000 of profit is taxed at about 12.2% in Ontario rather than your personal rate up to 53.53%. Incorporating also adds limited liability between the flips and your personal assets. The trade-offs are annual T2 filing, a minute book and higher compliance costs. We model the break-even on your actual flip volume, and where it makes sense we incorporate and move any existing property in on a section 85 rollover.
Do house flippers qualify for the small business deduction?
Yes, when they flip through a corporation. Flipping is an active business, an adventure in the nature of trade, not a specified investment business, so a flipping corporation’s profit qualifies for the section 125 small business deduction on the first $500,000 at about 12.2% in Ontario. This is a key reason serious flippers incorporate. We document the active-business character so CRA cannot recharacterize the income and strip the deduction.
How do I account for a flip as inventory?
A flip is inventory under ITA 10, never capital property, so you claim no CCA. Instead, the purchase price, renovation material and labour, contractor costs, carrying-cost interest, property tax, staging, realtor commission, legal fees and land transfer tax are all capitalized to the property and matched against the flip sale proceeds under section 9 when it sells. The difference is your gross profit per flip. We set up per-flip project costing in QuickBooks Online or Buildertrend so every cost lands in the right place.
What expenses can I deduct on a flip?
On a flip, you capitalize rather than simply deduct: the purchase price, renovation material costs, renovation labour, contractor costs, permits, staging, carrying-cost interest, property tax and utilities during the renovation, insurance, legal fees, realtor commission and land transfer tax all become part of the property’s cost base under ITA 10. They are matched to the sale proceeds when the flip closes, reducing your gross profit per flip. We make sure nothing is missed, because an uncapitalized cost is tax you overpay to CRA.
How does CRA audit house flippers?
Real estate is one of CRA’s top audit targets. It looks for principal-residence claims on quick flips, unreported HST on substantially renovated and new homes, flips reported as capital gains that should be business income, and unreported assignment income. CRA also uses indirect verification of income on cash-heavy flippers, comparing deposits and lifestyle to reported profit. We keep your flips reported correctly, your records complete for the six years CRA requires, and defend any review or reassessment.
What is the HST New Housing Rebate?
The GST524 New Housing Rebate refunds part of the 13% HST on a newly built or substantially renovated home. On a flip that is a taxable supply, it can offset a meaningful share of the HST you charge or self-assess on the sale. Eligibility and the amount depend on the price and who occupies the home, and the federal portion phases out on higher-priced homes. We determine whether your flip qualifies and file the GST524 to recover what it can.
How do I get started?
Book a free consultation and you will know your exact fees within two minutes. Call 647-212-9559 or email info@gondaliyacpa.ca.

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House Flipper Accounting & Tax Done Right.

T2 filing, the 12-month property flipping rule, flips taxed as business income, HST on substantially renovated homes and the GST524 rebate, inventory accounting, and the $500,000 small business deduction under one roof. AFFORDABLE flat fees, no hourly billing. Licensed CPA Ontario. 1300+ five-star reviews. 30-Day Money-Back Guarantee.



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