July 27, 2017 4:48 pm

Canada Revenue Agency cracking down on presale condo flippers

Simon Little / CKNW
A A

If you’ve made money flipping a presale condo in Vancouver, you may soon get a call from the taxman.

The Canada Revenue Agency (CRA) is targeting people who have bought and then sold contracts for presale condo properties, to check whether they’ve paid taxes on the money they made.

LISTEN: CKNW’s Simi Sara and Charmaine de Silva explain the CRA crackdown

In two separate applications in Federal Court, the Minister of National Revenue is asking the developers behind Vancouver’s Marine Gateway and The Residences at West projects to disclose the names of any “assignors” who flipped property before construction was complete.

WATCH: Research finds condo flipping on the rise in Vancouver

Assignment clauses allow the prospective buyer of a property to sell their purchase contract to a third party before the closing date on the deal.

READ MORE: Condo flipping on the rise as Vancouver market heats up: Realtor

Someone who buys into a presale and then flips the contract never has their name on the land title, and only the developer has an official record of the transaction.

Many developers no longer allow the practice, but some still do.

READ MORE: BC Government ends practice of shadow flipping in Vancouver real estate

Now, the CRA wants to know who has flipped presales in order to check whether tax has been paid on income made from the deals.

That profit can sometimes be in the hundreds of thousands of dollars.

So far, no response has been filed in court.

© 2017 Global News, a division of Corus Entertainment Inc.

Report an error

Comments

Want to discuss? Please read our Commenting Policy first.