Aiming to return fairness to the housing market
In a move to crack down on tax evasion through property and end the practice of hidden real estate ownership, BC has introduced a public registry to track the purchase (and flipping) of pre-sale condos. This unique registry is the first database of its kind in Canada and hopes to identify those who hide their wealth in real estate, ensure the proper taxes are paid and improve transparency in the market.
Known as the Condo and Strata Assignment Integrity Register (CSAIR), the registry will take “real action to moderate the condo market” according to Finance Minister Carole James. James says that the province has an international reputation as an easy place to invest anonymously and hide money— “British Columbia has developed a reputation as an attractive place to anonymously invest and hide wealth.”
The registry is paying specific attention to the practice of flipping pre-sale contracts, also known as contract assigning. This occurs when a buyer sells their purchase contract of a condo to another buyer before the building construction and development is complete. This ‘flipping’ is a factor in the rising real estate prices and is also used for tax evasion as these transactions are not reported. It is also thought that pre-sales enable foreign buyers to have earlier access to residents rather than British Columbians.
“For too long, speculators and tax evaders have been taking advantage of loopholes in our real estate market, driving up prices and shutting British Columbians out of the market,” James says.
CSAIR collects data from all developers who are required to securely gather and report information such as the identity and citizenships of anyone completing a contract assignment. The system and all the information are accessible to the CRA, auditors, and law enforcement as well as federal and provincial regulators in order to help with any investigations.