British Columbia’s online land registry system was strained amid a crush of applications trying to beat an Aug. 2 deadline for a new tax that imposes an additional 15 per cent fee for property transfers for foreign investors.
Late Thursday, the Land Title and Survey Authority of British Columbia sent out a notice that it was invoking temporary procedures that would allow email or in-person applications, a process that was continuing Friday, the last business day before the new tax comes into effect on Tuesday.
Provincial officials said the LTSA’s Internet portal would be open from 6 a.m. to 11 p.m. on Saturday, Sunday and the holiday Monday, which should enable lawyers and notaries to e-file property transfers and receive confirmation of pending registration before the Aug. 2 deadline.
“The system has been up and down,” according to an operator at one of the government’s offices in the Metro Vancouver area. “It’s just the volume of applications at one time that we are getting.”
Foreign buyers will pay the extra tax on residential real estate in Metro Vancouver, a move British Columbia announced Monday to cool the country’s hottest market. B.C. already has a property tax transfer rate of one per cent on the first $200,000, two per cent on the portion greater than $200,000 up to and including $2 million, and three per cent on the portion of the fair market value greater than $2 million.
Realtors and lawyers were reporting brisk business Friday because of the short notice, which the Real Estate Board of Greater Vancouver has complained bitterly about.
“Hundreds of British Columbians head into the B.C. Day long weekend facing stress and uncertainty concerning the largest financial transaction of their lives because of the provincial government’s abrupt intervention into the Metro Vancouver housing market this week,” said Dan Morrison, the president of the board, in a statement.
Realtors had argued for an exemption that would allow previously negotiated deals to be exempted from the tax, but the Liberal government of Christy Clark rejected that request.
“The Premier’s decision not to exempt transactions where home sellers have an accepted contract in place, with a non-Canadian buyer, that will not close before Aug. 2 is needlessly causing real harm to real people,” Morrison said. “Our members are scrambling to try and help people understand how their personal and financial situations have been impacted.”
We were going to have a super busy week to begin (with), the market is just stupid here
The province’s land registry office also appears to be scrambling with the unprecedented demand to close, forcing it to send out an email to users about special rules for this month. For those who have questions or need assistance, the LTSA’s customer support line will be 9 a.m. to 1 p.m. during the long weekend.
“The LTSA is offering temporary filing procedures for those customers who may be experiencing issues with application submission due to system issues affecting the LTSA’s Electronic Search and Filing services. These temporary filing procedures will allow electronic land title applications to be submitted by email or in person,” the email said. “The procedure should only be used for those applications that cannot be electronically filed and must be submitted for registration on July 29, 2016.”
Tony Spagnuolo, a Vancouver real estate lawyer, said in his 25 years in the industry he has never been as busy as this past week.
“We were going to have a super busy week to begin (with), the market is just stupid here. Month end, everybody wants their deal to go through and every month it’s like this. The last week is always non stop but they have added this (new tax and the need to close a transaction) on top of it,” Spagnoulo said. “We didn’t add more deals, but now they are all rushes.”
Doug Porter, chief economist with Bank of Montreal, said he expected a very busy day Friday. The impact on Vancouver’s July’s data will be hard to say, Porter added.
“It will make July’s data almost impossible to reconcile or analyze. We’ll have to look at July and August or combined. Maybe even September. We don’t know how many deals got pulled forward.”