CRA investigating ‘shadow flipping’ of Toronto condos

By Sabina Mexis ( December 12, 2017, 8:56 AM EST) -- The booming residential real estate market in Canada has caused the Canada Revenue Agency (CRA) to engage in increased scrutiny of the practice of “shadow flipping” or “assignment sales.” This is a sales technique which involves the purchase of prebuilt condos from a developer and subsequent sale to other buyers at higher prices before possession of the condo has been taken. By relying on an assignment clause in the agreement of purchase and sale, the potential purchaser can transfer or sell his interest in the property to another purchaser before the closing date at a profit.  ...