A crackdown on non-payment of taxes on presale condo flips is one of three new housing measures announced by the finance minister April 24.
If legislated, changes to the Real Estate Development Marketing Act will require that developers report presale condo assignments to ensure that flippers pay capital gains and property transfer taxes when assigning a purchase contract to a new buyer. The ministry stated that developers must include terms in their contracts to tell buyers about the new requirements.
“For too long, people who resell condos before they have been built have been inflating real estate prices, without necessarily paying taxes on their gains,” said finance minister Carole James. “We are making it fairer for people who want to buy a condo, by making sure those who flip presale condos are paying their fair share.”
Two other pieces of legislation were also announced, with “the aim of helping local governments protect and encourage the building of affordable rental housing, and to respond to the housing needs of their communities,” according to the ministry.
One measure will allow municipalities to zone areas for rental housing only, through the use of a new rental zoning tool. Any undeveloped land that is zoned for rental would need to be developed with rental projects. The amount of rental housing that needs to be developed on that land would be “at the discretion of the local government.” For example, stated the ministry, local governments may require that 40 per cent of the units in new multi-family residential buildings in a certain zone be rental.
It added, “The rental zoning authority will be optional for local governments.”
“Local governments have been looking for tools to protect and enhance the supply of rental homes,” said Union of BC Municipalities president Wendy Booth. “The proposed legislation will facilitate affordable rental development in B.C. communities.”
The final announcement was legislation that, if approved, would make it mandatory for municipalities to “conduct housing needs assessments that will assist with community planning.” The provincial government would support local governments with a $5 million fund, and municipalities would be mandated to prepare housing needs reports every five years.
The finance ministry stated that these reports will “help ensure that governments have the data needed to produce the appropriate housing solutions for each community.”