April 24 (Reuters) - Real estate developers in British Columbia will soon be required to collect and report information on people buying and flipping condo presale units, as the province ramps up its crackdown on tax fraud amid an escalating housing affordability crisis.
Under a change to real estate laws introduced by the New Democratic government on Tuesday, developers will be required to report the information to the province and the Canada Revenue Agency.
“This is a key step to stopping people using presale condos as a quick, lucrative investment,” provincial Finance Minister Carole James told reporters.
The market for presale condos, units sold by developers but not yet completed, has turned red hot in Vancouver, even as a foreign buyer tax has sent detached home sales plunging. nL1N1NM2M7]
Prices have been escalating so quickly that some presale units are flipped multiple times, with each owner taking gains, before the building is even completed.
As developers are not required to report any ownership information until construction is complete, some people may be flipping their units without paying capital gains and other taxes, said James.
The rule changes come two months after the New Democrats promised to clamp down on presale flipping as part of their 30-point housing plan.
The government also introduced legislation on Tuesday that will give municipalities the power to designate certain neighborhoods as rental-only zones and to ensure existing rental buildings will not be redeveloped for other uses.
Reporting by Julie Gordon in Toronto; Editing by Peter Cooney