B.C. sets up condo registry to deter tax evasion
Database will share transactions, ‘condo flipping’ details with CRA
British Columbia will set up a registry to track the ownership of new condominium projects under development to crack down on tax evasion in the real estate industry, the western Canadian province said.
Starting Jan. 1, developers will be required to collect and report on purchase agreements of presale condominium units, including when these contracts are flipped and reassigned to a new owner, according to an emailed statement from the Ministry of Finance. Developers must also make a “reasonable effort” to report on past transactions, according to the rules.
“The days of avoiding taxes through condo flipping are over,” Finance Minister Carole James said in the statement Monday.
“This registry 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.”
Developers often market new projects through presale purchase agreements that give a buyer the right to acquire a unit when complete. During the recent boom years of Vancouver’s real estate market, such rights were sold from one buyer to the next at increasingly inflated prices without the gains being taxed because there was no way to track the transactions.
The information collected by the new online database, which will include the terms of such transactions and the name and tax identification numbers of those involved, will be shared with the Canada Revenue Agency, so that they can be matched with income tax returns, according to the statement.