Resicom – Holiday Investment – 04-21 – LB

British Columbia Crackdown on Property Hidden Ownership

British Columbia Parliament Building

The British Columbia government have announced a crackdown on property ‘hidden ownership’ as part of its drive to tackle the booming property market.

Overseas property investors in British Columbia are able to buy real estate using numbered companies, corporations and offshore and domestic trusts, which obscure true ownership and can be used to dodge taxes.

Minister of Finance Carole James said in a statement: ‘British Columbia has developed a reputation as an attractive place to anonymously invest and hide wealth. Ending this type of hidden ownership in real estate will help us fight tax evasion, tax fraud and money laundering.’

The new law that has been proposed by the left-leaning New Democratic Party (NDP) government is part of a broader plan to crack down on real estate speculation and create more affordable housing.

The province introduced a 15 per cent foreign buyer tax in 2016, boosting it to 20 per cent this year. However, critics say that offshore investors are buying through numbered companies and proxies to avoid the tax.

The proposed new law will be open for public comment before being introduced but plans to impose strict new rules on providing the names, nationalities and identification numbers of those people purchasing real estate through corporations, trustees, and partnerships.

The government said that this will help law enforcement, regulators, and tax authorities to investigate and ensure appropriate taxes are being paid.

The British Columbia area of Vancouver has seen property prices rise by over 80 per cent in the last five years to an average of C$1.1 million, while rents in British Columbia have also risen sharply.

While overall ownership numbers for foreign buyers are relatively low, housing experts have claimed that they have an out-sized impact on high-end and new-build housing, driving up prices across all segments.

Overseas property investors buying real estate in British Columbia anonymously beware. The government is after you.

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