New B.C. real estate regulations take effect May 16 to require realtors to get written consent of sellers if they are assigning a home sale to a new buyer.
Changes to the Real Estate Services Act regulations also require realtors to pay any additional profit to the original seller, to stop to a practice dubbed “shadow flipping” that has emerged from a hot Metro Vancouver real estate market.
Finance Minister Mike de Jong also announced changes to the B.C. property purchase tax form, requiring buyers who are not Canadian citizens or permanent residents to state their citizenship. Corporations buying property have to provide names and citizenship of non-Canadian directors, starting in June.
The announcement comes as a committee created by the Real Estate Council of B.C. investigates allegations of misconduct regarding shadow flipping.
De Jong said it would take at least six months to get a sense of how much foreign investment is coming into the B.C. real estate market, and whether it is concentrated in the high-end market or extends to mid-priced properties.
De Jong said he is reluctant to target foreign buyers for a real estate speculation tax, as has been urged by Vancouver council. The government hosted a business delegation from China this week, with more than 200 government and business representatives led by Guangdong province Party Secretary Hu Chunhua.
NDP leader John Horgan said the anti-flipping changes are a step in the right direction, but the government is “slow walking” towards the foreign investor issue as the B.C. Liberal Party reaps millions in donations from Vancouver real estate developers.
In the legislature, de Jong said the opposition was first demanding the government do something about Metro Vancouver properties bought as investment and left vacant, until a survey showed the vacancy rate is lower than it was 12 years ago.
He said Vancouver is joining the ranks of cities such as Sydney, New York and Hong Kong in the global demand for luxury real estate. Rather than try to suppress demand with taxes, which hasn’t worked in other cities, the government wants to see municipalities approve new development and density to increase supply, de Jong said.