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Increasing transparency in real estate to deter crime
As the attorney general and finance minister review independent reports about money laundering links to the real estate sector and possible loopholes, the province moved forward with plans to establish a public registry of all land owners in B.C., something Carole James claims will help crack down on money laundering and tax evasion.
The registry will be the first of its kind in Canada. James introduced legislation Tuesday that requires corporations, trusts and partnerships to register who the beneficial – or true – owners of properties are. She says it will operate similar to a land title registry that holds information about individual property owners. Some of the detailed information will be shared with tax officials, police and other regulators. If the legislation passes, the registry could be up and running sometime next year.
“Shining a light on transparency is one of the best things you can do when you're talking about getting rid of money laundering or getting rid of bad action when it comes to housing,” James told reporters in Victoria after introducing the Land Owner Transparency Act.
In terms of enforcement, James says auditors will conduct random checks and stiffer fines await companies found to be breaking the rules. For criminal offences, the maximum penalty is $100,000 or 15 per cent of the assessed property value. Administrative penalties could mean up to $50,000 in fines or five per cent of the property’s assessed value.
Speaking to the need of for such a registry, a government press release notes a 2016 Transparency International Report that suggested “nearly one-third of the 100 most valuable residential properties in Greater Vancouver were owned by shell companies.”
The province says the registry will be self-funded through filing and search fees.
Both James and David Eby say they are reviewing the money laundering reports and hope to speak to the recommendations as soon as possible.