VANCOUVER (NEWS 1130) – The Federal Revenue Minister Diane Lebouthillier has asked the Canada Revenue Agency to look into the actions of real estate speculators in BC following an investigation by a national newspaper.
Stating “make sure that the cheats are caught,” Vancouver Mayor Gregor Robertson says he’s heard rumblings for some time that the CRA has not been properly equipped to deal with real estate tax evaders. “I think it’s unfortunate that those laws were not being enforced for some years. I heard that through people in the industry. I heard that the CRA did not have the resources to actually enforce those laws of tax evasion.
When asked directly if he felt the CRA has a shortage of auditors, Robertson says he will count on the feds to make that call. “I am very hopeful that the CRA will actually enforce the laws of Canada that ensure tax evasion is penalized and it’s obviously been a concern in the real estate industry for some time.”
The mayor says he made his case on this issue with Federal Finance Minister Bill Morneau back in June, expressing concerns speculators weren’t paying appropriate taxes or capital gains levies.
Over the weekend, the Globe and Mail reported some foreign investors allegedly profited in buying homes in BC while evading taxes. That report prompted the NDP’s housing critic to take direct aim at the premier, accusing Christy Clark and her government of turning a blind eye to the problem in the region’s white-hot real estate market.
The federal minister says she is concerned by the allegations and has asked the CRA to look into them. Her request follows comments by BC’s Finance Minister Mike de Jong, who said the CRA must be diligent in enforcing the law in order to maintain the confidence of taxpayers.
De Jong says the 15 per cent tax on foreign homebuyers introduced on August 2nd, was intended to address some of the issues raised in the Globe and Mail story, but did not specify whether the government would be taking any new or different actions.
Meantime, the BC Real Estate Association says 8,945 residential unit sales were recorded by the Multiple Listing Service in August, that’s up 1.5 per cent from the same month last year. Total sales came in at $5.1 billion in August, down 6.7 per cent compared to the previous year. The agency says the average residential price in the province was $569,393, a decline of 8.1 per cent compared to the same month last year.
“Strong housing demand across most regions of the province offset slowing home sales in Vancouver last month,” says BCREA Chief Economist Cameron Muir. “The newly introduced 15 per cent foreign buyer tax combined with the three per cent property transfer tax on homes over $2 million brought in earlier this year, slowed demand at the top end of the market in Vancouver last month.”
“The decline in the average home price was due to a change in the composition and location of homes sold in the province,” added Muir. “Fewer sales of high priced detached homes relative to all other homes sales in Vancouver as well as fewer Vancouver home sales relative to the rest of the province has caused the average price statistic to decline.”
Year-to-date, BC residential sales dollar volume increased 39.1 per cent to $61.6 billion, when compared with the same period in 2015. Residential unit sales climbed 22.1 per cent to 86,206 units, while the average residential price was up 13.9 per cent to $714.400.