Real estate agencies, lawyers and notaries are scrambling to close the sale of homes in Metro Vancouver before the 15 per cent foreign buyer tax comes into effect Tuesday.
"Hundreds of British Columbians head into the B.C. Day long weekend facing stress and uncertainty concerning the largest financial transaction of their lives," said Dan Morrison, president of the Real Estate Board of Greater Vancouver, which represents nearly 13,000 Realtors.
Because of the holiday weekend, today (Monday) was the last day to close real estate sales before the tax comes into effect on Aug. 2.
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Companies like Royal Pacific Realty have seen a surge in activity as sellers and buyers try to close before the end of the day.
The new rules take effect Aug. 2 and only apply to home purchases in Metro Vancouver, excluding the treaty lands of the Tsawwassen First Nation.
Provincial Finance Minister Mike de Jong unveiled the tax as part of legislation aimed at addressing low vacancy rates and high real estate prices in southern B.C.
Last month, the Real Estate Board of Greater Vancouver said its benchmark price for detached properties in Vancouver rose above $1.5 million.
Deal closures doubling
Vancouver's Royal Pacific Realty is Western Canada's largest independent real estate company. On most Fridays, it usually closes under 100 deals. This week has been different.
"This time I would say it's almost double – 60 or 70 deals more," said Sing Yeo, vice-president of the company.
Yeo says some lawyers and notaries are so swamped, they have had to turn people away. Yeo says they are trying to help his clients understand what is at stake, but that if they don't get their papers in by today, there is nothing they can do.
That worries Vancouver real estate agent Jamie Stewart.
"Canadian sellers that have sold to non-residents who can't complete or won't complete are in trouble," said Stewart. "People will face bankruptcy over this."
Stewart is worried about the Canadian families who had expected to close deals with a foreign buyers have already committed to another house. If the foreign buyer backs out because of this tax, these families could default on their new homes.
"I understand them wanting to cool off the market," said Stewart, "but not in this way."
"I think it's very unfair that we weren't given a grace period," said Stewart, "very un-Canadian that the government has instilled this new legislation and there's so many people that are going to be caught in the crossfire."