Jane Armstrong, CBC News
The Real Estate Council of B.C. has told a Vancouver real estate agent to stop advising clients on how to avoid the proposed 15 percent foreign buyers’ tax announced earlier this week by the provincial government. foreign buyers’ tax
The council is investigating Century 21 Realtor Mike Stewart after he circulated an email to clients that describes how a foreign buyer of a pre-sale condo can skirt the new transfer tax, chiefly by selling their contract to buy the pre-sale unit to friends or family who are Canadian citizens or residents. foreign buyers’ tax
“For those of you who do not have that option, we may be able to sell the pre-sale to a third party at a profit to you,” the email goes on to say. foreign buyers’ tax
Real Estate Council spokesperson Marilee Peters said the council caught wind of Stewart’s email on Wednesday, asked him to stop and launched an investigation. foreign buyers’ tax
Stewart did not respond to an interview request, but he told CKNW Radio that he thought the tax unfairly affected people who purchased pre-sale units.
“There are people from all over the world, from all walks of life, who have bought properties that are pre-construction, pre-sale, and that are completing in a few years with the expectation of moving here or settling here, and they’ve been suddenly hit with a 15 percent tax rather arbitrarily,” Stewart said.
And he said he wasn’t urging people to avoid paying taxes. foreign buyers’ tax
“It is primarily a specific solution for a very specific situation. I want to be very clear: I am not telling anybody about how to avoid a tax that is payable because that is illegal and that is not something that I do, and that I am allowed to do,” he said in the interview.
“What this entails is for international buyers who have bought pre-construction, so they have not registered at land titles. According to my understanding, these are exempt from the taxation rules,” he said. foreign buyers’ tax
Premier weighs in
The tax, which was announced Monday by the B.C. government and which is slated to pass through the legislature this week, would add an additional 15 per cent property transfer tax on the purchase of homes in Metro Vancouver by foreign buyers. foreign buyers’ tax
The tax would take effect next Tuesday, Aug. 2, and aims to address concerns about skyrocketing housing prices. Some experts have argued that foreign buyers have helped fuel the price increases. foreign buyers’ tax
Foreign buyers of pre-sold condos that close after Aug. 2 must pay the new tax once construction on their unit is completed and it’s registered at the land registry. But opposition NDP housing critic David Eby has said the ability to re-assign a purchase contract for a pre-sold condo means there is a loophole that would still allow people to flip pre-sale condos and avoid the new tax. foreign buyers’ tax
On Wednesday, Premier Christy Clark weighed in, warning that auditors will take a close look at real estate deals structured to get around the new tax. foreign buyers’ tax
“Realtors should not be doing that,” Clark told reporters at a news conference in Vancouver. “And they should know, they should be informing their clients, that every single one of these transactions could be audited…. foreign buyers’ tax
“Anyone trying to find loopholes is going to discover very quickly that those loopholes don’t stand up.” foreign buyers’ tax