After legislation was introduced in Metro Vancouver last year with the aim of cooling the scorching market, one Vancouverite wants to bring more transparency to the market by helping the government catch potential tax evaders.
Dubbed Vancouver’s real estate Twitter Batman by a user on the social media platform, Twitter user @mortimer_1 has recently been tweeting about possible cases of home flipping in the region and has been tagging the Canadian Revenue Agency (CRA) to catch their attention.
Mortimer, who asked to conceal his true identity, is pointing out potential cases of home flipping in the region in an effort, he says, to help the government collect any unpaid taxes.
“The CRA may already be aware of these sales, but in case they aren’t, I try to highlight some home sales for them to consider taking a look at to ensure they collected any taxes owing,” Mortimer tells BuzzBuzzNews via email.
The Vancouver local says he is not involved in the real estate industry. Instead, he believes he’s simply lending a free helping hand to the CRA.
“I do not claim any wrongdoing by the sellers. If they made money on a flip, good for them. I just want to ensure they are paying their fair share of any taxes owing on the sales,” Mortimer says.
In July 2016, home price growth in Greater Vancouver climbed a record 32.6 per cent year-over-year with speculation considered a major contributing factor for the region’s red-hot activity. In an effort to cool the market, last August the BC government implemented a 15 per cent foreign-buyer tax for Metro Vancouver.
However after the levy took hold, one realtor says this year house flipping remains on the rise in the City of Vancouver as 4.36 per cent of homes have been bought and sold within one year compared to 4.13 per in 2016.
Mortimer says he uses public sources online to find flipped home sales and focuses his leads on single-family detached homes in Vancouver, West Vancouver, Richmond, North Vancouver and Burnaby.
“I don’t tend to look at condos or townhouses, as people may make the argument that these could be ‘move-up’ buyers,” says Mortimer.
It’s not clear if the CRA is taking notice of Mortimer’s tweets but in an email response to BuzzBuzzNews it says individuals are encouraged to call or write to the CRA’s Leads Program if they suspect that a taxpayer is violating Canada’s tax laws.
The federal agency adds that home flipping is not illegal in Canada as long as the appropriate taxes on the sale are paid.
In Canada if a taxpayer receives a profit from the sale of a property they are subject to income tax on 50 per cent of the capital gain, says the CRA. For those who are in the business of buying and selling properties, they instead might have to pay a business gain that is fully taxable. In addition, GST and HST rates might apply to taxable sales of real estate.
However, a taxpayer can designate a home as their primary residence which usually exempts them from paying taxes on any gain on the sale.
With respect to real estate flips, the CRA says money made must be reported to the federal agency and the profits made are generally considered to be fully taxable as business income.
With federal and provincial legislation introduced last year to help ease Greater Vancouver’s market, the CRA says it has also stepped up its game to detect any wrongdoing.
“Audits related to real estate occur regularly across the country. The CRA has increased its efforts in the real estate sector, especially in British Columbia,” says the CRA.
Committed to helping the CRA retrieve owed taxes, Mortimer says he would like to conduct an in-depth search of previous real estate flips in the region but is limited to the data available online.
“If the real estate boards would make historical individual home sale data available to the public, I could do a much more thorough review of prior transactions,” says Mortimer.
As for being nicknamed Batman for what some Twitter users view as his free public service, Mortimer is somewhat hesitant to embrace the characterization.
“There are a lot of great journalists and people in Vancouver doing a lot more than me to bring more transparency to the Vancouver real estate market, I am only a tiny piece. Those people are the real Batman and Robins,” says Mortimer.