One of the lesser known facets of the Government of British Columbia’s 30-point plan for B.C. residents and housing affordability is the fact that they are beginning to finally crackdown on an issue that can plague the housing market — tax evasion.
Per a news release issued by the Ministry of Finance, as part of the aforementioned 30-point plan, the Province is ensuring that property buyers — including real estate speculators — will have to disclose more fleshed out and complete information when they make purchases through any given corporation or trust.
“Our government has been clear that the days of skirting tax laws and hiding property ownership behind numbered companies and trusts are over,” said Carole James, the Minister of Finance. “Not only is tax evasion in real estate fundamentally unfair, but it’s driving up the cost of housing for people who live and work in our communities. These changes give authorities another tool to make sure people are paying the taxes they owe.”
Starting on Sept. 17, 2018, the new property transfer tax return will reportedly require individuals to report additional information when any given transaction is structured through a corporation or trust.
Ultimately, this will help the provincial government in identifying people with a significant interest in a particular property and in turn, ensure the correct amount of tax is paid.
The news release states that additional information, such as name, date of birth, citizenship details, contact information and tax identification numbers — such as a social insurance number — will now be required during these transactions.
Furthermore, the new reporting requirements will apply to all property types, including residential and commercial housing. Accordingly, there will also be exemptions for certain trusts, such as charitable, as well as corporations, such as hospitals, schools and public libraries.
This change was made to complement some of the other actions the B.C. government is currently undertaking to address tax fraud and close loopholes in the real estate market.
Per the Ministry of Finance, some of these actions include consulting on legislation to establish a new, publicly accessible registry of who owns real estate in B.C., as well as the introduction of a new law to track pre-sale on condominium contract assignments and prevent tax evasion.
Additionally, the Province is working on establishing a federal-provincial working group on tax fraud and money laundering, while also sharing further information on the homeowner grant with federal tax officials to improve tax enforcement and subsequently strengthening property transfer tax auditors’ abilities to take action on tax evasion.