DATE: Thursday, April 18, 2024

TIME: 10:00 am

VENUE: 100 - 1200 West 73rd Avenue, Vancouver (Royal Pacific head office at Airport Square)

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PROJECT: “PINE & GLEN” by Nick Belmar, VP Sales, Onni

PDP SEMINAR: “Role of a Restoration Contractor” by Paul Davis, Restoration Services

Lunch sponsored by Onni

The BC NDP government has followed through on a February 2024 budget promise and introduced legislation to tax home flipping, beginning in 2025.

Bill 15 2024: Budget measures implementation (Residential Property (Short-term holding) Profit Tax) Act, known as the home flipping tax, applies to income from the sale of a property, including presale contracts, in BC if the property was owned for less than 730 days.

Types of properties

The tax will apply to income earned from the sale of:

• residential properties with a housing unit;

• properties zoned for residential use; and

• the right to acquire properties, such as the assignment of a purchase contract for a pre-build condo building.

Presale contracts

If your client enters into a presale contract to buy a property under development, and buys the property – they close on the property once it is complete, for the purposes of the two-year window of the tax – they’ll be considered to have acquired it on the date they entered into the presale contract.

If your client is assigned a pre-sale contract and then closes on the built property, the acquisition date is the date they were assigned the contract.

When your client assigns a presale contract to another person within two years of entering into the presale contract, they’ll pay tax on any income received from the assignment.

Tax amount

The tax applies to:

• individuals or companies selling property; and

• net taxable income from the sale of taxable property that was owned for less than 730 days.

The tax is:

• 20 per cent tax on profits of homes sold within a year of purchase.

• 10 per cent if sold after 18 months.

• Not applied if your client sells after two years.

Key dates

The tax is effective on January 1, 2025. Residential property bought before this date may be subject to the tax if sold on or after January 1, 2025 and owned for less than 730 days unless an exemption applies.

For example:

• If your client purchased a property on May 1, 2023, and sold the property on January 31, 2025, income earned from the sale of the property would be taxable.

• If your client decided not to sell the property until June 1, 2025, then income earned from the sale would not be subject to the tax since your client owned the property for more than 729 days.

The property seller may be a BC resident or a resident anywhere else in the world.

Exemptions

There are exemptions for:

• life circumstances including separation or divorce, death, disability or illness, relocation for work, involuntary job loss, a change in household membership, personal safety, or insolvency; and

• those adding to the supply of housing or engaging in real estate development and construction.

The tax doesn’t apply to Indigenous Nations, charities, governments and government-owned corporations, and non-profits.

Primary residence deduction

If your client sells their primary residence and they owned the property for less than 730 days, they may qualify for a deduction of up to $20,000 from their taxable income if:

• they owned the property for at least 365 consecutive days before they sold it; or

• the property includes a housing unit that they lived in as their primary residence while they owned it.

If your client sells a portion of their interest in the property, their primary residence deduction amount will be proportionate to that interest.

More information available

The Ministry of Finance has provided more details on their website, including how the tax is calculated and additional examples related to pre-sales.

Note: the BC home flipping tax is NOT the federal property flipping rule, which is a separate federal tax.

Questions?

If you have questions about the BC flipping tax, contact Harriet Permut, director of government relations at hpermut@gvrealtors.ca. 

Learn more

• Learn more about the BC home flipping tax

• Read Bill 15 2024: Budget measures implementation (Residential Property (Short-term holding) Profit Tax) Act

The number of Metro Vancouver1 homes listed for sale on the MLS® rose nearly 23 per cent year-over-year, providing more opportunity for buyers looking for a home this spring.

Sales

The Greater Vancouver REALTORS® (GVR)2 reports that residential sales3 in the region totalled 2,415 in March 2024, a 4.7 per cent decrease from the 2,535 sales recorded in March 2023. This was 31.2 per cent below the 10-year seasonal average (3,512).

Listings

There were 5,002 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in March 2024. This represents a 15.9 per cent increase compared to the 4,317 properties listed in March 2023. This was 9.5 per cent below the 10-year seasonal average (5,524).

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 10,552, a 22.5 per cent increase compared to March 2023 (8,617). This is 6.3 per cent above the 10-year seasonal average (9,923).

GVR Stats Package for March 2024

PORTHAVEN, Pt Coquitlam

DATE:          Wednesday April 10,  2024

TIME:          12:00pm – 1:00pm (refreshments and drinks)

LOCATION: 2630 Shaughnessy Street, Pt Coquitlam

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The SKY ESTATES AT HIGHLINE METROTOWN

Exclusive Royal Pacific Realtor & Client Event

Saturday April 6th, 2024

11am - 1pm

Location: 6511 Sussex Avenue, Burnaby

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2 - $100 DOOR PRIZES

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6511 Sussex Avenue, Burnaby

Sales Centre Open  Saturday - Thursday  12pm-5pm

By Appointment: Call Esther 778-552-4921

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AMENITIES

Include : Concierge, Level 11 - Fitness Centre, Yoga Room, Steam Room, Sauna and Outdoor Deck , Level 4 - Multipurpose Room, Dining & Social Lounge, Outdoor BBQ Deck, Dog Run, Children's Play Area, Guest Suites and Business Centre

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SURREY, BC –Home buyers in the Fraser Valley have more choice heading into the spring market with inventory levels for March at the highest they’ve been in the past five years.

However, March sales were slower than anticipated with 1,395 transactions recorded on the Fraser Valley Real Estate Board’s Multiple Listings Service® (MLS®), a 13 per cent increase over February, but still 31 per cent below the 10-year average. Sales were the second lowest recorded for a March in a decade. Active listings were 6,197, up by 11 per cent over last month and by 37 per cent over March 2023.

FVREB Stats Package for March 2024

In an effort to increase the supply of long-term residential housing, the BC Government has introduced the Short-Term Rental Accommodations Act) which will have substantive effects on many individual homeowners.

In brief, the legislative changes include:

1. Limiting short-term rentals to the host’s principal residence plus one secondary suite or accessory dwelling unit (ADU) in most major BC communities (populations of 10,000 or more or adjacent communities) effective on May 1, 2024.

2. Empowering regional districts to license short-term rentals located outside municipalities.

3. Data sharing from short-term rental platforms is required to monitor and enforce the rules.

4. Removal of legal non-conforming use or grandfathering of historical short-term rental use.

5. Creation of a provincial registry for short-term rentals and a compliance and enforcement unit.

These rules exclude hotels, motels, strata hotels, timeshares, fishing lodges, First Nations reserve lands, and modern treaty lands (unless those First Nations opt in).

Importantly, the new rules serve as a baseline for the province, but they do not supplant stricter municipal restrictions; for example, the City of Kelowna has recently removed short-term rentals as a secondary use for all zones.

The new legislation will affect real estate across British Columbia. Here are some common questions from REALTORS® across the province:

Q: How do we advise clients who currently own short-term rental accommodations?

A: Clients should be aware that the new provincial Short-Term Rental Accommodations Act will come into force as of May 1, 2024. This Act is in addition to any municipal rules and strata bylaws that already apply. Clients should examine whether their use complies with the new law.

Q: I have a listing in a small or resort municipality; how do I know if the new short-term rental accommodations principal residence requirement applies here?

A: There are several exemptions: small and resort municipalities, mountain resort and electoral areas (including the Gulf Islands), and most municipalities with a population under 10,000 people (except those adjacent to larger municipalities; e.g., Highlands, Belcarra, Anmore, Qualicum Beach, Peachland). Small exempt municipalities, which are initially exempt from the principal residence requirement in the legislation, may opt in. Realtors should check the list of included and exempted municipalities as part of their due diligence (see the full list here).

Q: How do I advise buyers looking to purchase short-term rental accommodations?

A: The current housing shortage in British Columbia is prompting governments at all levels to respond in various ways. Clients should be aware that laws are constantly changing, and current permitted uses may change. Buyers looking to purchase short-term accommodations should be aware that a number of laws have been recently amended to address the housing shortage, including local bylaws, provincial laws (e.g., Short-Term Rental Accommodations Act, Speculation and Vacancy Tax, etc.), and federal laws (e.g., Foreign Buyers Ban, Underused Housing Tax, etc.), which may affect their intended and future uses. REALTORS® should draft specific subject conditions to allow buyers to do the legal due diligence necessary to determine if the target property will support short-term rental use.

Q: One of my clients purchased a pre-sale condo and intends to use it for short-term rentals. With the introduction of the legislation, do they now have a new right of rescission for a material change after their initial 7-day recission right has passed?

A: This will depend on the nature of the pre-sale condo development, the contract, and the disclosure statement applicable for that unit. Developers are required to provide continuous and accurate disclosure, and affected buyers should be advised to seek immediate legal advice specific to their situation.

Q: If I am listing a property that is currently a short-term rental, do I need to disclose the change in the law?

A: The change in law has been published and advertised by the government; therefore, this would not be considered to be a material latent defect and would not require separate Rule 59 disclosure. There may be practical reasons that a REALTOR® and a client may choose to provide this as prudent additional disclosure (for example, to ensure a smooth closing); however, this should only be done with your client's specific direction.

Q: A local strata building wants to petition the mayor to “opt-out” of these provisions. Are they able to do so?

A: While the legislation has “opt-out” mechanisms for local government where the rental vacancy rate is 3 per cent or higher for two or more years, these provisions are limited and only apply to a geographic area, not a specific building or parcel. There is no mechanism in the legislation for a single property or building to be exempted, even if the local government desires this. 

These legislative changes will affect buyers, sellers, strata corporations, and developers differently depending on each client's unique circumstances. As these are general guidelines only, REALTORS should ensure that their clients obtain legal advice specific to their respective clients' circumstances.

More information on how these changes affect BC's real estate is available from BCREA and BC Financial Services Authority.

Listing and buyer agency contracts are terms we use so often we may not give them much thought. But it’s important to remember that they are contracts. The words in them have meaning, and describe the rights and obligations of the parties. Our familiarity with them may, just sometimes, lead us to forget what they mean or take them for granted. That’s a risk, as we all know. 

Take a listing contract, for example. The parties to that contract are the seller and your brokerage, not you. You’re appointed as the designated agent for the seller. 

Your managing broker, as the representative of the corporate entity known as your brokerage, “owns” the listing. This means your managing broker has complete discretion, by virtue of the brokerage policy manual and your independent contractor agreement, to decide what to do with the listing contract should a seller demand it be cancelled. Ditto for a buyer agency contract.

Sometimes, no matter how hard you’ve tried, there isn’t a buyer willing to come to your seller’s party. Despite the advertising, showings, and all the other work you’ve done, there’s no buyer knocking on the seller’s door.

"That can be frustrating for the seller, not to mention to you and your bank account. Sometimes, this can lead to a frayed agent-seller relationship. Sometimes, despite your best efforts, the seller will tell you they want the listing contract cancelled so they can try their luck with someone else."

That’s understandable, but there’s no early cancellation of contract language in either the standard listing form or buyer agency contract. This means the seller can’t cancel you without your (more technically, your managing broker’s) consent, and you can’t cancel your seller (or buyer) without their consent. 

As you can imagine, we don’t often hear from sellers or buyers who are unhappy that their agent is trying to cancel them.

When we do hear from sellers, the conversation often goes like this: “I want to cancel my listing, but your member won’t cancel it.”

We point out they’re in a contract with the brokerage and suggest they speak to your managing broker. We sometimes add that Greater Vancouver REALTORS® (GVR) isn’t a party to the contract and therefore, can’t cancel it. Feathers can get ruffled.

What are the options? Let’s take a look. (A GVR managing broker suggested I write about this topic.)

First, if you and your managing broker agree to it, the listing can be cancelled. Maybe you have good business reasons for saying goodbye. But you don’t have to cancel it early if you don’t want to. A refusal to cancel isn’t usually grounds for a professional conduct complaint—although the underlying reason for the cancellation demand might be. That’s a discussion for another day.

Which brings me to the two types of cancellation.

The first is a “standard” cancellation of listing contract. The standard form contains a clause saying that if the property sells after the cancellation, your right to collect the commission, as specified in the listing contract, remains alive until 60 days passes or the original contract expires, whichever comes first. If the seller really doesn’t want to sell and wishes to take the property off the market, then this clause shouldn’t concern them. Process the cancellation and move on. 

The second type of listing cancellation is an “unconditional release,” which means exactly what it says. When signed, you and the seller no longer have any rights or obligations under that contract. It’s dead and buried, which may be something you want.  

"But consider this: signing an unconditionally released contract means there’s no going back to claim a commission. This would be a pain if a buyer's agent had shown your listing with that buyer and later contracts with the seller directly to make a deal. It’s possible the buyer agent could want you to go after your seller for a commission, which you have now unconditionally waived. A tad messy, no? Think about this before you consider giving someone an unconditional release of listing."

There's a third option if your seller client is unhappy. If you agree to part company but don’t want to extinguish your rights under the listing contract by unconditionally releasing (or cancelling) it, you could offer the seller a “transfer of listing.”

With such a transfer, you agree to transfer a live listing contract to someone else, without affecting the rights of the parties. When I was a broker, I pushed for a transfer rather than an unconditional release, all day long. It’s up to you and your client (and the transferee brokerage) whether you negotiate a fee of some kind in return for agreeing to a transfer.

Top tip: Size does, indeed, matter

A longtime member writes: “[Here’s] something to address in your articles: I’m not sure if this might cause a legal issue if someone wanted to pursue it. Writing on a contract or subject removal that has a font so small it takes a magnifying glass to read it. This means a REALTOR® can’t read it with the naked eye, [nor can] the client and, at completion, a lawyer/notary. I’m seeing this more and more. Trying to stuff everything on one page on WEBForms just keeps shrinking the font to unreadable levels. I currently received a subject removal that had to be magnified to the max to barely read it.”

Kim's comment:

Vanity stopped me from getting reading glasses for many years before I finally gave in and bought some. Now I have a pair of cheap readers in every place I sit. If you do the same it means you never lose your glasses because you take them off and put them down as you leave your chair, confident that you’ll have the use of another pair in all the different places you sit, as you read something.

Notwithstanding that great plan, I still end up in situations where I am squinting at a screen or a page, trying to figure out what it says. That might be okay when choosing a movie to stream, but it isn’t okay when you’re helping clients with a contract involving big life decisions, like moving homes.

So in answer to this member, I’d say, I hear you. It’s annoying to see text reduced in size to fit into a form field. It’s not only annoying, it’s a liability risk for all concerned, including you. For members who haven’t yet reached an age where they’re reminded everyday that their eyes aren’t what they once were, can I suggest on behalf of the member, please do your clients, your colleagues, and someone’s else’s clients a favour. Make your font size big enough to read without an electron microscope.

Are you looking for housing statistics you can share with your clients? How about reports and market forecasts?

Then you need to check out Greater Vancouver REALTORS®’ (GVR) new Economics Web App at economics.gvrealtors.ca. You can also access it under the Market Watch section at gvrealtors.ca.

Using this app, you can find everything the GVR Economics team produces all in one spot, including:

• Forecasts and in-depth analyses for both the residential and commercial markets.

• Recordings of economics-focused presentations and events hosted by GVR.

• Analytics for residential and commercial markets.

• Downloadable data for the residential and commercial markets.

• Branded residential market charts you can use in presentations and reports.

• And more!

 We’ll be adding new content and features regularly, so be sure to bookmark the page and check back often.

Take a look around and let us know what you think!

Link to view : PARKWAY | Bosa Properties | Downtown Surrey Condos 
Password: Intersect

DATE: Friday March 15,  2024

TIME: 7:30 pm – 9:00 pm (with client, request form available),
           NOTE: this is the only time for RP.

LOCATION: 10460 City Parkway, Surrey

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PKWY 2 - Feature Sheet
PKWY 2 - Floor Plans (more to come)
PKWY 2 - Interest Builder Program
PKWY 2 - Realtor Info Sheet

LOTUS – the Botanical Collection – Laurel & W 32nd

DATE: Thursday March 14,  2024

TIME: 10:00 am (breakfast served at 9:50 am)

LOCATION: Royal Pacific Realty Corp (Airport Square)

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Schedule:

Lotus Presentation
RP pre-sales projects update
Self-directed PDP Hour

Topic:

BMO presents REALTOR/CLIENT NEEDS TO KNOW MORTGAGE PREAPPROVAL PROCESS

While Metro Vancouver1 home sellers appeared somewhat hesitant in January, new listings rose 31 per cent year-over-year in February, bringing a significant number of newly listed properties to the market.

Sales

Greater Vancouver REALTORS® (GVR)2 reports that residential sales3 in the region totalled 2,070 in February 2024, a 13.5 per cent increase from the 1,824 sales recorded in February 2023. This was 23.3 per cent below the 10-year seasonal average (2,699).

"While the pace of home sales started the year off briskly, the pace of newly listed properties in January was slower by comparison. A continuation of this pattern in February would have been concerning, as it could quickly tilt the market towards overheated conditions. With new listings up about 31 per cent year-over-year in February, this will relieve some of the pressure that was building in January and offer buyers more choice as we enter the spring and summer markets." - Andrew Lis, REBGV director of economics and data analytics

Listings

There were 4,560 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in February 2024. This represents a 31.1 per cent increase compared to the 3,478 properties listed in February 2023. This was 0.2 per cent below the 10-year seasonal average (4,568).

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 9,634, a 16.3 per cent increase compared to February 2023 (8,283). This is three per cent above the 10-year seasonal average (9,352).

View the GVR Stats Package for February 2024