Vancouver real estate: Owners begin filing info for B.C.'s new 'hidden ownership' registry

Vancouver real estate: Owners begin filing info for B.C.'s new 'hidden ownership' registry

Vancouver home sales were up 23 per cent in November. PHOTO BY PETER J. THOMPSON/NATIONAL POST FILES

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The start this week of a “hidden ownership” registry in B.C.had lawyers and notaries public going through the first live test of filing to meet the new requirements on one of the busiest end-of-the-month days in recent memories.

The property filing rush was also caused by a 23 per cent jump in Vancouver home sales in November, compared to November 2019, just as the ownership registry, aimed at tackling money laundering through real estate purchases, kicked in.

“Anyone who isn’t an individual buying real estate with their own name on title, it’s now a bit more complicated. The (government is) asking for a lot of information, from SIN numbers to other personal details,” said real estate lawyer Khushhal Bains. “There were some glitches, but it’s going reasonably well.”

Any corporation, trustee or partnership that buys land in B.C. must now disclose the interest holders of that land through what will be known as theLand Owner Transparency Registry. Existing registered land owners have one year to register and disclose their interest holders.

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The goal is to create a publicly searchable database of information on individuals that directly or indirectly own real estate in B.C.

“What they’re actually after is tracing down the ownership chain so that you actually get to the individuals who have some degree of control over the property itself,” said Sarah Jones, partner and co-chair of commercial real estate at Clark Wilson LLP.

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“It can be a fairly labour-intensive thing, gathering all the records in one place and then making sure you are actually determining who is the individual and whether or not they have control. Sometimes that’s not as straightforward as it appears to be.”

The registry was legislated by the NDP government last year after a panel estimated that, in 2018, $5 billion was laundered in B.C. real estate purchases, raising home prices by five per cent. A report by Transparency International Canada in 2016 found almost a half of the most expensive residential properties in Vancouver were held by shell companies, nominees or trusts that allow for obscuring owners’ identities.

The registry also means more hurdles for many buyers who use trust and company arrangements to make real estate purchases for run-of-the-mill, family tax planning reasons, said Ron Usher, a lawyer for the Society of Notaries Public of B.C., which represents over 400 notaries public.

One increasingly common scenario is when parents of an adult child go on a land title to satisfy bank lending requirements in a very expensive property market where prices have long outstripped incomes.

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“We’re all going to require transparency reports and fairly elaborate, written documentation between adult child and mom and dad. These are going to require more time and more money.”

Usher supports the registry and was part of the panel that recommended the registry and other changes to B.C. real estate regulations.

“All of this information is going to be available to taxation authorities, police and government agencies, the public to some degree, a portion will be publicly searchable starting next year,” he said. “These are all trade-offs.”

“It’s being done with good intention, with the best of ideas, but unless we, for example, properly fund and coordinate investigative agencies, all we’ve done is created a very expensive, massive database.”

With a file from The Canadian Press

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