Foreign buyers lured by loopholes, low dollar

'Bare trust' lets offshore investors duck property transfer tax, while local residents are priced out of Metro Vancouver housing, NDP says

Finance Minister Mike de Jong

While young people struggle to rent or buy a home in Metro Vancouver, overseas investors are snapping up high-end commercial real estate thanks to a low Canadian dollar and loopholes in the property transfer tax, opposition MLAs say.

Finance Minister Mike de Jong changed the tax rules in his latest budget to exempt buyers of new homes up to $750,000, and increased the rate from two to three per cent for value over $2 million. But the province continues to reap a windfall on resold homes, the vast majority of the market, with one per cent on the first $200,000 and two per cent on value between $200,000 and $2 million.

NDP housing critic David Eby says the tax not only drives up already unaffordable home prices, it can still be avoided by offshore investors buying up downtown Vancouver office towers like the Bentall Centre and Royal Centre.

The NDP and some municipal officials are also calling for a non-resident tax on residential purchases, to deter foreign buyers from buying property and leaving it empty as values climb.

“There is a huge frustration in Metro Vancouver that spreads all the way up to Squamish, where people are tired of the fact that their wages have no connection to real estate prices, and they are fed up,” Eby said.

The province is moving to restore citizenship and residency declarations for real estate purchasers, but de Jong says he needs to collect data to measure the problem of non-resident investors before taking action.

Data are also needed for a commercial property technique developed to avoid the property purchase tax when it was imposed in 1987. A “bare trust” separates legal and beneficial ownership, allowing the property to change hands without paying the transfer tax.

De Jong said bare trusts and share transfers, where the registered owner doesn’t change but controlling interest does, are long-accepted business practices.

“We actually do encourage people to come to British Columbia and invest,” de Jong said. “The purpose here is to ensure that they are paying their fair share, that they are abiding by the laws that British Columbians and Canadians must abide by, and to ensure that we have to make sure we have the information necessary to enforce those rules.”

 

Just Posted

Site C dam goes ahead, cost estimate now up to $10.7 billion

Premier John Horgan says Christy Clark left him no other choice

Ucluelet irked as Tofino spurns Pacific Rim Visitors Centre

“This council really hoped that we were going to try to foster some new relationships.”

Tofino honours longtime volunteer

Notes from Nov. 28 council meeting.

Jamie’s Whaling Station gives big to local non-profits

Over $80,000 in visitor fees donated back to community.

Me Too At Work: Sexual assault and harassment in the B.C. workplace

Introducing an in-depth look at who is affected and what can be done

Proposed snowmobiles along Sicamous roads concern RCMP

RCMP, ICBC and province not yet on-board with proposed off-road bylaw in the B.C. Interior

‘Assemble your own meal’ kits grow into $120M industry in Canada

Kits offer a middle ground between eating out and grocery shopping

Millennials closing in as B.C.’s biggest wine drinkers

Generation X leads the way in current consumption of B.C. wine, as more wine drinkers are enjoying local varietals

Canadians lag behind Americans in giving to charity

Only one-in-five Canadians donated to charities in 2017

Pair of pubs in Nanaimo scrap straws

VIU Students’ Union Pub, Dinghy Dock Pub no longer put straws in drinks

One man in hospital following targeted shooting in Courtenay

A 57-year-old Courtenay man is in hospital with a gunshot wound following… Continue reading

B.C. children adoption rates lagging, despite increased funding: watchdog

More than 1,000 children children are still waiting to be adopted, new report shows

FortisBC to lower natural gas rates in 2018

Rate changes to impact the Lower Mainland, Kootenays, Interior and Vancouver Island

Most Read