Foreign buyers lured by loopholes, low dollar

'Bare trust' lets offshore investors duck property transfer tax, while local residents are priced out of Metro Vancouver housing, NDP says

Finance Minister Mike de Jong

While young people struggle to rent or buy a home in Metro Vancouver, overseas investors are snapping up high-end commercial real estate thanks to a low Canadian dollar and loopholes in the property transfer tax, opposition MLAs say.

Finance Minister Mike de Jong changed the tax rules in his latest budget to exempt buyers of new homes up to $750,000, and increased the rate from two to three per cent for value over $2 million. But the province continues to reap a windfall on resold homes, the vast majority of the market, with one per cent on the first $200,000 and two per cent on value between $200,000 and $2 million.

NDP housing critic David Eby says the tax not only drives up already unaffordable home prices, it can still be avoided by offshore investors buying up downtown Vancouver office towers like the Bentall Centre and Royal Centre.

The NDP and some municipal officials are also calling for a non-resident tax on residential purchases, to deter foreign buyers from buying property and leaving it empty as values climb.

“There is a huge frustration in Metro Vancouver that spreads all the way up to Squamish, where people are tired of the fact that their wages have no connection to real estate prices, and they are fed up,” Eby said.

The province is moving to restore citizenship and residency declarations for real estate purchasers, but de Jong says he needs to collect data to measure the problem of non-resident investors before taking action.

Data are also needed for a commercial property technique developed to avoid the property purchase tax when it was imposed in 1987. A “bare trust” separates legal and beneficial ownership, allowing the property to change hands without paying the transfer tax.

De Jong said bare trusts and share transfers, where the registered owner doesn’t change but controlling interest does, are long-accepted business practices.

“We actually do encourage people to come to British Columbia and invest,” de Jong said. “The purpose here is to ensure that they are paying their fair share, that they are abiding by the laws that British Columbians and Canadians must abide by, and to ensure that we have to make sure we have the information necessary to enforce those rules.”

 

Just Posted

Oak Bay High student selected for Canada Youth Olympic Team

Barbarians rugby player Lachlan Kratz heads to Las Vegas for Qualifiers

Man charged in suspected Greater Victoria bus assault

The Victoria Police Department has arrested a man for sexual assault aboard… Continue reading

Library’s French collection gets $15,000 boost

Provincial grant adds extra French-language materials to Greater Victoria Public Library collection

Cruise Industry Job Fair on Saturday

Nearly 900 jobs created by the industry

Celebrating the heroic dogs of Saanich past

Cedar Hill exhibit features great dogs of history

VIDEO: What you need to know today at the B.C. Games

B.C. Winter Games athletes work for gold in the last full day of competition

Cougars hold upper hand on Westshore in VIJHL South semifinal

Victoria leads series 2-0, games 3 and 4 go tonight and tomorrow

Looking back at the 1979 B.C. Games: Good memories, even better jackets

39 years later, Kamloops is hosting the Winter Games again, with some volunteers returning

OLYMPICS 101: Oldest and youngest Canadian’s to reach the podium

This year, Canada sent its most athletes in Winter Games history, here’s a look at record breakers

Snowboarding debuts at B.C. Games

Merren deBellefeuille was lone Vancouver Island (Zone 6) athlete in ladies’ snowboard cross

BCHL Today: Cowichan Caps play spoiler and Nanaimo wins 10th straight game

BCHL Today is a (near) daily look at what’s going on around the league and the junior A world.

Federal budget to unveil incentive for 5-week second parent leave: official

Goal behind the measure is to give parents more incentive to share child-rearing responsibilities

Notley says Alberta watching B.C. court bid closely, will get no free ride on it

Alberta Premier Rachel Notley ended the three-week ban on B.C. wine, calming the trade war

Trudeau ends troubled India trip in his comfort zone of hockey and youth

The players, 18-25, came to New Delhi from Ladakhi in northern India, as part of outreach program

Most Read