The B.C. government is creating a new, publicly accessible registry of who owns real estate in the province. When established, it will be the first database of its kind in Canada.
The province is making the move in attempt to crack down on tax evasion through home ownership and is designed to improve transparency in the real estate market.
“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 Carole James, Minister of Finance.
“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.”
The registry will provide tax auditors and law enforcement agencies, as well as federal and provincial regulators, the information needed to help with investigations. Legislation is expected to be put forward in the fall that would officially establish the database.
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The provincial government has growing concerns that British Columbia has become an internationally renowned place to create anonymous companies and hide wealth.
“While other jurisdictions have sought to apply land transfer tax to transfers of beneficial ownership, these policies have not necessarily resulted in improved transparency to prevent tax avoidance and evasion,” said James.
“In order to prevent tax evasion, fraud and money laundering, the provincial government needs to end hidden ownership, ensuring the ability to look through legal entities, like offshore trusts, and find out who is behind them.”
The province has posted information online about the proposed changes. British Columbians have until August 19, 2018 to provide feedback.
The government has included draft legislation. Part of that includes the disclosure requirements in three situations:
- On any application to register an interest land in the name of a reporting body
- Any time there is a change of interest holders or beneficial owners (even when this does not result in a transfer of legal title to the land)
- During an initial transition period, all those holding an interest in land for a beneficial owner will be required to file a disclosure report