British Columbia is tackling tax evasion in condominium sales by setting up a registry that tracks a project’s pre-sales transactions and ownership history.
According to a Bloomberg report, 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.
Because there was no way to efficiently track transactions, it was possible to avoid paying taxes by buying and selling rights from pre-sale purchase agreements at inflated prices.
Starting January 1, however, developers will now be required to collect and report pre-sale agreements of condominium units, including when these contracts are flipped and re-assigned to a new owner.
"The days of avoiding taxes through condo flipping are over," said Finance Minister Carole James.
"This register 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."