Issues Update: Transparency in the Real Estate Market
While there is still more to do and I look forward to releasing Peter German’s report, recommendations, and announcement of further areas of study to the public this summer, I am very pleased with what is already underway:
Strengthened Audit Powers and Enhanced Information Sharing
The Property Transfer Tax Act has been changed to enhance administration and information sharing with tax enforcement authorities. For example:
- The limitation period for property transfer tax assessments is extended to six years
- Additional information is collected on property transfer tax returns, including tax identification numbers for individuals using bare trusts
- An administrative monetary penalty for non-compliance is introduced
- The general anti-avoidance rule is extended to the entire Act
- Access to additional information on property transactions, including information in a multiple listing service database, is enabled.
We are also:
- sharing information on the homeowner grant with federal tax officials to improve tax enforcement.
- establishing a federal-provincial working group on tax fraud and money laundering.
Stopping Tax Evasion on Pre-Sale Condo Assignments
We have tabled legislation to create a registry of pre-sale condominium assignments, to be accessible by federal and provincial tax authorities to ensure tax compliance at provincial and federal levels. Developers will be required to collect and report comprehensive information on such assignments.
Unveiling the Identities of the True Owners of Residential Properties
The Province is establishing a new, publicly accessible registry of who owns real estate in British Columbia. Residential property will no longer be allowed to be held by numbered companies or anonymous trusts. It will be the first registry of its kind in Canada, and will improve transparency in the real estate market. It will provide tax auditors and law enforcement agencies, as well as federal and provincial regulators, with information that will assist with their investigations.
The proposed legislation is set out in a white paper that includes the draft land owner transparency act. The new law would authorize the collection of beneficial ownership information, as well as the creation and administration of the public registry.
This measure will be supplemented by the Government’s new requirement for property owners to disclose more information about beneficial ownership on Property Transfer Tax return forms. Furthermore, the Government will introduce legislative amendments requiring BC corporations to keep updated information on beneficial owners in their records offices. These initiatives target speculators, tax frauds and those participating in money laundering.
British Columbians are invited to share their feedback on the white paper proposal until Aug. 19, 2018. Read the white paper: www.fin.gov.bc.ca/pld/fcsp/consultLOTA.htm
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