Vancouver realtor probed for 'how-to' email on avoiding new property transfer tax

The Real Estate Council of B.C. has told aVancouver real estate agent to stopadvisingclients on howto avoidthe proposed 15 per cent foreign buyers' tax announced earlier this week by the provincial government.

The council is investigatingCentury 21 realtor Mike Stewartafter hecirculated an email to clients thatdescribes how a foreign buyer of a pre-sale condo can skirt the new transfer tax, chiefly by selling their contractto buy the pre-sale unitto friends or family who are Canadian citizens or residents.

• Foreign buyersaccount for 10%of Metro Vancouver real estate transactions, government says

"For those of you who do not have that option, we may be able to sell the pre-sale to a third party at a profit to you," the email goes on to say.

Real Estate Council spokesperson MarileePeters said the council caught wind ofStewart'semailonWednesday, asked him to stop and launched an investigation.

Defends email

Stewart did not respond to an interview request, but he told CKNWRadiothat he thought the tax unfairly affected people who purchased pre-sale units.

"There are people from all over the world, from all walks of life, who have bought properties that are pre-construction, pre-sale, and that are completing in a few years with the expectation of moving here or settling here, and they've been suddenly hit with a 15 per cent tax rather arbitrarily," Stewart said.

And he said he wasn't urging people to avoid paying taxes.

"It is primarily a specific solution for a very specific situation. I want to be very clear:I am not telling anybody about how to avoid a tax that is payable because that is illegal and that is not something that I do, and that I am allowed to do," he said in the interview.

"What this entails is for international buyers who have bought pre-construction, so they have not registered at land titles. According to my understanding, these are exempt from the taxation rules," he said.

Premier weighs in

The tax, which was announced Monday by the B.C. government and which is slatedto pass through the legislature this week, would addan additional 15 per cent property transfer tax on the purchaseof homes in Metro Vancouver byforeign buyers.

The tax would takeeffect next Tuesday, Aug. 2, and aims to address concerns about skyrocketing housing prices. Some experts have argued that foreign buyers have helped fuel the price increases.

Foreignbuyers of pre-soldcondosthat close after Aug. 2must pay the new tax once construction on their unit is completed and it's registered at the land registry.But opposition NDP housing critic David Eby has said the ability to re-assign a purchasecontract for a pre-sold condo means there is a loophole that would still allow people to flip pre-sale condos and avoid the new tax.

On Wednesday, Premier Christy Clarkweighed in, warning that auditors will take a close look at real estate deals structured to get around the new tax.

"Realtors should not be doing that," Clark told reporters at a news conference in Vancouver."And they should know,they should be informing their clients, thatevery single one of these transactions could be audited....

"Anyone trying to find loopholes is going to discover very quickly that those loopholes don't stand up."