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

Woodwynn Farms to be shut down and sold

The rehabilitation program at Woodwynn Farms is being shut down. According to… Continue reading

False missile alert for Central Saanich councillor

While on vacation in Hawaii, Central Saanich Councillor Alicia Holman was awoken… Continue reading

Victoria airport nearing billion-dollar mark in economic impact

Airport has nearly doubled its passengers and its impact on the economy since 2005

More buoys allowed for Brentwood Bay

Proposed number rises from 40 to 60

Victoria airport reaches nearly two million passengers in 2017

This year expected to see additional growth

Sidney’s Salish Sea aquarium to close for maintenance

First extended closure for the Shaw Centre for the Salish Sea since it opened in 2009

Butchart Gardens is hiring now and paying more

Wages start at $15, job fair Feb. 20

Cash still needed for Stelly’s Cross Path

MLA Olsen wants more specifics first

Injured parachutist wants stolen backpack back

Bag contained important video files of 2017 parachuting incident

World’s fastest log car made in B.C. sells for $350,000 US

Cedar Rocket auctioned off three times at Barrett-Jackson Co., netting $350,000 US for veterans

Bad timing: Shutdown spoils Trump’s one-year festivities

Trump spends day trying to hash out a deal with Senate Minority Leader Chuck Schumer

RCMP nail sex toy thief

Shop owner plays a role in arrest

Ice-cream-eating bear draws controversy

An Alberta Wildlife Park posted a video this week of one of their bears going through a Dairy Queen drive-through

LETTER: The sewage spiral continues in Greater Victoria

My left brain has been trying to digest the news and comments… Continue reading

Most Read