VANCOUVER (NEWS 1130) – An affordability advocate is calling on the British Columbia government to make changes to tax loopholes being exploited by the real estate industry.
In the last month, Rohana Rezel says he’s seen listings for two multi-million dollar properties – one in Vancouver and another in West Vancouver – highlighting that buyers can avoid paying tax.
That’s because the properties are owned by bare trusts, allowing buyers to skip transfer taxes. The properties are owned by a company so when they’re sold, they can just change the names of the directors of that company.
“The way it’s done is – you just change the director of the trust and you are good to go,” Rezel says.
The province has made some changes with a new registry, but he says that only goes so far.
“Under the new regulations you can’t just hide behind a bare trust, but in terms of avoiding taxes – you still can do that.”
At least now, Rezel says, the identity of the directors named on bare trusts are known but they still don’t have to pay tax.
The province has vowed to crack down on this tax loophole and is creating a beneficial ownership registry to go online next year. Rezel says it’s time for them to take the next step and close the loophole.