British Columbia is taking further action against unfair and illegal practices involving real estate.
The government announced Monday that it will implement a condo and strata assignment register designed to crack down on tax evasion and increase transparency and fairness for British Columbians.
Currently those flipping pre-sale condo assignments sometimes avoid paying the appropriate taxes but the new register will collect comprehensive information about condo and strata assignments.
“We will not allow real estate speculators and tax frauds to take advantage of loopholes in the system any longer, and this register sends a clear message. The days of avoiding taxes through condo flipping are over,” said Carole James, Minister of Finance. “This register will help bring fairness and integrity back to B.C.’s real estate market, so that people can afford homes in the communities where they live and work.”
The rules from January 1, 2019
Effective Jan. 1, 2019, developers who sell strata lots in development properties must:
- include terms and a notice in their contracts to inform buyers of the new collection and reporting requirements;
- collect information, including the terms of the assignment and the name and social insurance number or business information of the parties to the assignment; and
- report this information in the online register.
Information will be shared with the CRA so that transactions can be linked with tax returns.
The BC government says the information will ensure that the final purchase prices of condos – including assignment amounts - are recorded and the appropriate property transfer tax paid.
It will also use the data to inform future housing and tax policy.
Compliance for developers
The Land Title and Survey Authority of British Columbia will manage the online register system.
In order to comply with the new assignment reporting requirements, developers must update their contracts by Jan. 1, 2019, and must have a myLTSA Enterprise account by March 31, 2019.
The first assignment reporting period ends March 31, 2019, and the report is due on April 30, 2019.
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate