The “lack of enforcement” in Canadian housing for the longest time is what led to Vancouver’s current predicament, according to a CRA source who asked not to be named.
“Yes, we are getting a response now, but the government has known about this issue for a few years. They held back,” the source said, as quoted by the Vancouver Metro
Vancouver real estate lawyer Kenneth Pazder noted that strict enforcement of tax rules is a vital first step, but warned that the federal government’s attempt to crack down on tax evasion might be too little, too late at this point.
“There’s a lot of for money coming from dubious sources, and governments are just looking the other way,” Pazder said.
“Right now it’s still a free-for-all in the Lower Mainland … That’s what governments are trying to address, but it’s like closing the barn door a few years after the horses got out.”
Chloé Luciani-Girouard, the press secretary of Minister of National Revenue Diane Lebouthillier, recently announced that the government has assigned 70 auditors to the vital task of “detecting and addressing risk areas related to real estate transactions” in B.C. markets.
On Tuesday (September 13), Prime Minister Justin Trudeau said that he has allocated an extra $444 million for the CRA in this year’s budget to ensure “that there is better enforcement [so that] everyone pays their fair share of taxes,” and that the agency will be able to better “detect, audit, and prosecute” tax evaders.
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While the Canada Revenue Agency has been recently tasked by Minister of National Revenue Diane Lebouthillier to look into reports of offshore investors using resident buyers as proxies in purchasing Vancouver properties, doubts of the government’s commitment to addressing real estate tax evasion abound among market observers.