To the Editor,
Re: Province to take profit out of ‘shadow flipping,’ March 22.
You should use care when you print stories posted in other newspapers. Do some research first.
Capital gain earned by flipping housing is taxable. In the case of a realtor it would be interpreted as income and be taxed accordingly. This situation is extremely rare and a poor idea as the realtor is exposed to very harsh review in the event of a simple complaint to the local real estate board and or the real estate council. This is a nightmare consequence. Also, if poor advice was given by the realtor in negotiation and acceptance of a sale price, the realtor is liable for the shortfall if it can be proven there was negligence, or worse, fraud. Although it requires a court case to peruse compensation the courts tend to rule in favor of the consumer.
Property transfer tax, which is a very regressive form of taxation is only applicable on registration of title transfer. Nobody is avoiding it as it does not exist until a new owner takes title. What is potentially going to happen here is the provincial government will enact legislation for circumstances where a legitimate assignment takes place. There are very real situations where assignments need to take place to resolve unexpected difficulties for both parties to a transaction. It should be pointed out it is the law that vendors are advised before registration that an assignment is taking place. They are not in the ‘shadows.’
Real estate is a highly regulated profession with substantial control and consequences built into the system. If other professions were as well-regulated, our society would be a lot better off. All this said, I welcome the ensuing results of the process that is underway to provide our consumers better protection. I just regret that it is happening under slanderous circumstances.