A new public registry will aim to reveal the “true ownership” of real estate in B.C. – and ensure appropriate taxes are paid – by creating transparency over the individuals behind property-owning shell companies and trusts, the province announced June 20.
As part of its 30-point housing plan, which has seen the launch of a number of new taxation policies, the NDP government plans to establish the publicly accessible database of all real estate ownership across the province.
The registry, said the government, will be the first of its kind in Canada and will “help give tax auditors, law enforcement agencies and federal and provincial regulators the information they need to conduct their investigations.”
“British Columbia has developed a reputation as an attractive place to anonymously invest and hide wealth. Right now in B.C., real estate investors can hide behind numbered companies, offshore and domestic trusts, and corporations,” said finance minister Carole James in a media statement. “Ending this type of hidden ownership in real estate will help us fight tax evasion, tax fraud and money laundering. Our goal is to return fairness to the housing market.”
Realtor Barry Magee, who is based in Vancouver, said he strongly supported the move. “In 2018, when accurate statistics are desperately needed for those debating our housing issues, it’s of ultimate importance for British Columbians to know who owns property. Purchasing through a numbered company was eliminated in Ontario in 1983, and B.C. has the unfortunate distinction of being the only province to allow purchasers to use this method to skirt the owner registering with land titles and also avoiding paying property transfer tax. This is a no-brainer: eliminate the bare trust loophole and require any purchases made using this method in the past to register the owner of the property with land titles.”
The province’s proposal, which includes proposed new legislation called the draft land owner transparency act, is set out in a white paper. The new law, which would have to be passed in the legislature, would “authorize the collection of beneficial ownership information, as well as the creation and administration of the public registry.”
B.C. residents can share their comments on the white paper until August 19, 2018, by emailing email@example.com.
Other aspects of the province’s 30-point plan that aim to tackle tax evasion and close real estate loopholes include a proposal to track pre-sale condo contract assignments, otherwise known as “shadow flipping,” sharing information on the homeowner grant with federal tax officials and setting up a federal-provincial task force on tax fraud and money laundering.