Kenny Louie\/Flickr<\/a><\/em><\/p>\nOn Tuesday, BC\u2019s Minister of Finance Carole James announced a government crack down on tax evasion in pre-sale condo assignments, in an effort to address the province\u2019s housing crisis. However, Vancouver-based real estate consultant and architect Michael Geller says the new government rules could make the situation worse by reducing demand from investors. <\/span><\/p>\nIf approved by the legislature, the new amendments to the Real Estate Development Marketing Act will require developers to collect and report information on pre-sale condo assignments to ensure buyers are paying the appropriate taxes.<\/span><\/p>\n\n“It may take investors out of the market, especially those whose primary motivation was to flip the agreement before they closed. The net result may be a number of projects being put on the back burner because they can’t achieve their pre-sale targets demanded by the bank,\u201d Geller tells BuzzBuzzNews. <\/span><\/p>\nPre-sale condo assignments are a common occurrence in Vancouver. An assignment refers to a transaction that involves the owner of an unbuilt property selling the pre-sale contract to another buyer, while in turn making capital gains off the property\u2019s increased market value. Although developers keep records of pre-sale condo assignments, the sales are not registered with the City and no property transfer taxes are paid. <\/span><\/p>\n\u201cFor too long, people who resell condos before they have been built have been inflating real estate prices, without necessarily paying taxes on their gains,\u201d says James, in a press release. <\/span><\/p>\n
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