The president of the Real Estate Board of Greater Vancouver says there was no warning and no consultation by the province that a tax on foreign buyers was coming.
“The only people calling me more than the media today are realtors upset about this because they’ve got clients that are B.C. residents and voters that are going to get hit hard by this if their transactions aren’t exempt.”
Dan Morrison says a key issue is current transactions that are in the process of closing, which will be subject to the new tax, something he says will could bring short-term volatility.
“These transactions are going to be hit, and to use the price point that the government used in their press release, if it’s a $2-million transaction, all of a sudden there’s an extra $300,000 that’s due.”
Morrison says there could be jilted buyers who would rather forfeit a $100,000 dollar deposit to walk away from the deal to avoid paying the foreign tax and put the seller in a difficult decision.
“If they did, that puts the seller in a very difficult situation because based on the strength of that contract, they’ve gone out and committed to buying another house. If the buyer defaults on their house, they don’t have the funds necessarily to go and buy their new home. So you could get this chain reaction of contracts that don’t complete.”
Morrison says news of the tax came without any consultation, and with it going into effect on August 2nd, just eight days notice.
Add in the long weekend coming up and Morrison says it doesn’t give those in the middle of real estate transactions time to prepare.
It’s asking the province to exempt real estate deals in the process of closing because as is, the move “needlessly injects uncertainty into the market.”