Today the government announced that it was taking steps to collect data to ensure transparency of ownership of properties purchased through a corporation or a trust. As I note in the media release below, improving data collection and transparency is a good first step, but the province should proceed with applying property transfer tax to the transfer of beneficial ownership. Doing so would plug a loophole that lets corporations and wealthy individuals avoid paying BC’s property transfer tax.

It’s been almost five years since I began urging government to close this so-called bare trust loophole as was done in Ontario many years ago. Doing so is one of the most important steps government can take to crack down on speculative activity in the housing market.

Finally, and coincidentally, Great Britain announced similar measures today for offshore buyers. But in the UK case, stiff penalties and even jail sentences are being proposed if people “fail to register or attempt to file false information“.

Media Release

New property transfer data requirements show it’s time to close bare trust loophole: Weaver
For immediate release
July 25, 2018

VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green Party, says the government’s move to collect information on beneficial ownership of properties underscores the immediate need to close the bare trust loophole. Bare trusts allow for the transfer of beneficial ownership within trusts. Since no title change occurs, no property transfer tax (PTT) is paid.

“This data collection is a good first step, but the province should proceed with applying property transfer tax to the transfer of beneficial ownership,” said Weaver.

“Speculation is a major driver of the housing affordability crisis. The bare trust loophole incentivizes speculation. Preventing individuals and corporations from using it to avoid paying taxes is low-hanging fruit and should be dealt with immediately. Applying the PTT to beneficial ownership has been done in Ontario and is what is needed to close this loophole once and for all.”

Weaver has called for the closure of the bare trust loophole since 2015. The government first announced its intention to collect additional data on beneficial ownership in the February provincial budget. Today, it announced that it will begin the data collection on September 17, 2018.

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Media contact
Jillian Oliver, Press Secretary
+1 778-650-0597 | jillian.oliver@leg.bc.ca