Some Vancouver area realtors are getting creative in an attempt to help foreign buyers avoid the new 15% additional property transfer tax that takes effect next week.
Real Estate Specialist Mike Stewart sent an email, as seen below, to his clients letting them know they could assign the pre-sale purchase contract to a Canadian citizen or resident.
“So we are saying transfer the ownership or assign the ownership rights to a family member or trust your friend. Or in the case where that is not an option to potentially sell the contract to a Canadian resident or a Canadian citizen, so effectively increasing supply in the market.”
Stewart says he wants to make it clear it’s not illegal because the client bought pre-construction, meaning they haven’t actually registered yet at the Land Titles office.
The province say tax avoidance could net up to a $200,00 fine, a penalty and jail time.
LISTEN: Mike Stewart explains his letter to CKNW’s Shelby Thom
The Real Estate Council of BC is investigating, saying it’s told the licensee and brokerage to stop circulating the emails.
Premier Christy Clark says it’s not something realtors should be doing.
“They should be informing their clients that every single one of these transactions could be audited, and anybody trying to find loopholes is going to discover very quickly that those loopholes don’t stand up.”
She says the government is on solid legal ground.
“There are no loopholes in our legislation. It does not exempt pre-sales, and people have from the date of the introduction of the legislation, a week if they want to complete, and move up the completion date of the sale that is already underway. But it needs to be registered in the Land Titles office by August second in order to avoid the tax.”
In a statement, the Real Estate Council of B.C. says it has asked the licensee and brokerage to stop circulating the advertisement.
The Council says it has opened an investigation into the ad, and “will be looking into the matter very closely.”
It’s also reminding people to get legal or accounting advice before entering into any transaction promoted as a “solution” or measure to avoid payment of taxes, like the property transfer tax.