The provincial government announced three initiatives on Tuesday, April 24 to further mitigate the “housing crisis” in BC. The measures are intended to address both the demand and supply of housing by cracking down on tax evasion on pre-sale condominium assignments, giving municipalities the authority to protect and encourage the construction of rentals, and require communities to assess their housing needs on a regular basis.
“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 Carole James, Minister of Finance. “We are making it fairer for people who want to buy a condo, by making sure those who flip pre-sale condos are paying their fair share.”
Proposed changes to the Real Estate Development Marketing Act would require real estate developers to collect and report information on pre-sale condo assignments to ensure people are paying the appropriate taxes when these contracts are assigned. Developers would need to include terms in their contracts to inform buyers about the new collection and reporting requirements. The information will need to be reported to the provincial administrator designated under the Property Transfer Tax Act.
If approved by the legislature, proposed changes to the Local Government Act and Vancouver Charter would:
- Give municipalities the authority to limit tenure to rental through the use of a new rental zoning tool.
- For example, 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 will be at the discretion of the municipality.
- Allow municipalities to ensure existing rentals cannot be redeveloped for another use.
- For example, if an existing rental building is being considered for redevelopment, and a municipality has zoned the building as a rental, the new building must be rented to the extent determined by the municipality.
- Where applied, enable developers to know in advance that the permitted tenure will be rental, and if applicable, what portion of a development is required to be rental.
- For example, municipalities may require that 40 percent of the units in new multi-family residential buildings in a certain zone be rental.
- make it mandatory for municipalities to conduct housing needs assessments to assist with community planning every five years (this would be supported by $5 million in funding over three years from the provincial government)
The rental zoning authority will be optional for municipalities.
The BC Government says the proposed changes related to housing supply are in response to a request from municipalities for stronger zoning tools to support growth and encourage a healthier rental stock and data needed to produce the housing solutions for each community.
Originally published on the Fraser Valley Real Estate Board Newsreel.