The British Columbia government has released regulations to create a new condo and strata assignment register.
This register is designed to crack down on tax evasion and make B.C.’s real estate market more transparent and fair for British Columbians.
“We will not allow real estate speculators and tax frauds to take advantage of loopholes in the system any longer, and this register sends a clear message. The days of avoiding taxes through condo flipping are over,” said Carole James, Minister of Finance. “This register will help bring fairness and integrity back to B.C.’s real estate market, so that people can afford homes in the communities where they live and work.”
The existing real estate regime in British Columbia was vulnerable to those involved in flipping pre-sale condo assignments without paying the appropriate taxes. To crack down on tax evasion, the B.C. government is creating the Condo and Strata Assignment Integrity Register (CSAIR). The government will collect comprehensive information on condo and strata assignments through the register and help tax authorities find people who are not paying the appropriate taxes.
Effective Jan. 1, 2019, developers who sell strata lots in development properties must:
- include terms and a notice in their contracts to inform buyers of the new collection and reporting requirements;
- collect information, including the terms of the assignment and the name and social insurance number or business information of the parties to the assignment; and
- report this information in the online register.
The B.C. government will provide this information to the Canada Revenue Agency so that transactions can be traced back to the assigner’s income tax return. This will ensure that people who assign condos are paying the appropriate income taxes.
The government will use this information to ensure that buyers accurately report the final purchase price of a condo unit, including all assignment amounts, and pay the appropriate property transfer tax. The government will also use the information to inform future housing and tax policy.
The Land Title and Survey Authority of British Columbia will manage the online register system. In order to comply with the new assignment reporting requirements, developers must update their contracts by Jan. 1, 2019, and must have a myLTSA Enterprise account by March 31, 2019. The first assignment reporting period ends March 31, 2019, and the report is due on April 30, 2019.
The register is one part of the B.C. government’s 30-Point Housing Plan to address housing affordability. Already, the government has taken several actions to address tax fraud and close loopholes in the real estate market, including:
- Convened an Expert Panel on Money Laundering in Real Estate to identify systemic risks that leave the real estate and financial services sectors open to money laundering.
- Consulting on legislation to establish a new, publicly accessible registry of beneficial owners of real estate in B.C.
- Updating the property transfer tax return to uncover beneficial owners behind corporations and trusts.
- Enacting legislation to allow information sharing on the homeowner grant with federal tax officials to improve tax enforcement.
- Strengthening property transfer tax auditors’ ability to take action on tax evasion.
- Establishing a federal-provincial working group on tax fraud and money laundering.
Read the regulation: https://www2.gov.bc.ca/gov/content?id=344E710339E24E1C8C13F9409C154127
Information on the Condo and Strata Assignment Integrity Register for developers:https://www2.gov.bc.ca/gov/content/governments/organizational-structure/ministries-organizations/central-government-agencies/office-of-the-superintendent-of-real-estate/news
30-Point Plan for Housing Affordability: http://bcbudget.gov.bc.ca/2018/homesbc/2018_Homes_For_BC.pdf
Content curated from Vancourier.com