The western Canadian province of British Columbia said Tuesday new rules requiring property buyers who are neither Canadian citizens nor permanent residents to identify their country of citizenship will take effect June 10.
The measures are part of an effort to collect more data on the role foreign buyers are playing in the province’s property market, especially in red-hot Metro Vancouver, where residential prices jumped 25.3 percent in the last year, Reuters reports.
Many Vancouverites blame foreign buyers, mostly from mainland China, for pushing housing prices out of reach of local residents, though there is little official data available to back up the anecdotal claims.
The province also said new rules cracking down on property contract assignments — dubbed “shadow flipping” by local media — will come into effect May 16. The crackdown was announced in March.
In shadow flipping, the buyer agrees with the seller on a price for a property but, before the sale closes, resells the contract to a third party for a higher price.
The initial buyer takes the difference between the original and new selling prices as profit.
“Government will not tolerate unethical or predatory conduct in the real estate market,” Premier Christy Clark said in a statement.
The new rules require that all licensed agents include two terms in sales contracts, one requiring the seller’s consent before assigning a contract and a second requiring that any profit from a contract assignment be turned over to the original seller.
– Contact us at [email protected]