The B.C. land registry website almost crashed this week as thousands of people scrambled to close real estate deals before the new tax on foreign buyers takes effect.
The Land Title and Survey Authority confirmed its site went down late Thursday, after the system faced a surge in log-ins: 20 per cent higher than its busiest day ever. More than 8,400 applications were expected to be filed Friday, beating records set last June.
Since the provincial government announced its 15 per cent property transfer tax on foreign investors, realtors have been clamoring for an exception on contracts that were signed months ago but weren’t set to close before Monday’s deadline.
The Real Estate Board of Greater Vancouver is also warning the implementation of the tax is creating uncertainty and instability in an already volatile market.
“If the whole idea is to take the steam out of the market, why would you hit consumers with a tax on transactions that have already happened?” board president Dan Morrison said.
“Clients are upset. They’re scared.”
Langley realtor Greg Dent says foreign buyers deciding to forego their deposits and abandon sales to avoid the hefty tax, could impact locals. Broken sale contracts put sellers who are already be in the midst of purchasing a new home themselves in a tight spot.
“The domino effect is the real problem, and the British Columbians who will be impacted by this will be impacted in a big way,” Dent said.
According to the real estate board, not only are foreign buyers already walking away from deals, transactions between Canadians are being called off due to uncertainty about the market.
The B.C. Ministry of Finance has been adamant that no exceptions will be made, however. The ministry issued a statement Friday calling its quick implementation of the new tax “the fairest and most efficient” option.
“Whenever a tax policy decision is made, there may be those who feel that the timing of the change should be different,” a spokesperson said. “By making the announcement through the tabling of legislation, we were able to make the information available to all taxpayers at the same time.”
The priority in implementing the tax was to manage demand in the market and keep home ownership within reach for middle-class families, the ministry said.
The Land Title and Survey Authority said it will be continuing to accept filings over the weekend to deal with the crush of applications – an unprecedented move for the Crown corporation.
With files from CTV Vancouver’s Tom Popyk