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

Stelly’s sidewalk gets green light

Federal funding brings project to fruition

Witnesses sought for alleged drunk driver crash in Sidney

Crash happened June 16 on East Saanich Rd. and Canora Dr.

Fake crash warns students about real consequences

Saanich Peninsula emergency crews warn against distracted driving

An upstart ferry company might be a Malahat alternative

A new ferry service might alleviate Malahat congestion. Dogwood Ferries is a… Continue reading

Marijuana to be legal in Canada Oct. 17: Trudeau

Prime Minister made the announcement during question period in the House of Commons

In reversal, Trump signs executive order to stop family separation

President had been wrongly insisting he had no choice but to separate families apprehended at border

50 new fires sparked in B.C. after lightning strikes across province

Similar conditions seen at the beginning of 2017 wildfire season

B.C. woman graduates high school at age 92

Nanaimo’s Joan Deebank the oldest high school graduate ever in B.C., as far as ministry can confirm

B.C. Appeal Court rules lottery winner must be paid back $600,000 loan

Enone Rosas won $4.1 million in a lottery in 2007 and loaned a portion to a friend

B.C. man surprised after used needle falls from sky

A Vernon resident said a syringe fell out of the sky and landed at his feet

Liquor review finds issues with B.C. wholesale monopoly

Report calls for ‘conflict of interest’ in system to be fixed

Police look for driver of blue Jeep who may have helped at fatal crash

A 19-year-old girl was killed in a crash near Delta on June 2

Conservationists, industry react to fish farm provisions

New provincial regulations to take effect by 2022

B.C. ‘will be ready’ for marijuana legalization

Public Safety Minister Mike Farnworth says some stores open by Oct. 17

Most Read