Beginning this summer, homebuyers in the West Coast Canadian province of British Columbia will need to disclose whether they are citizens or permanent residents of Canada – and, if they’re not, say where they’re from, under new rules just unveiled in the province’s 2016 budget.
The new disclosure requirements are being introduced as part of a package of measures aimed at cooling a property boom that has been particularly overheated in Vancouver, which some critics have said has been fuelled by overseas buyers, particularly Chinese, settling there.
According to a “backgrounder” document on the province of British Columbia’s government’s website, “purchasers will be required to identify themselves as Canadian citizens or permanent residents”, and those “individual transferees who are not Canadian citizens or permanent residents will be required to disclose their citizenship”.
Corporations buying properties “will [also] be required to disclose their directors’ citizenship”, and transferees “will also be required to disclose whether or not they are holding the land as bare trustees when they register”, and where relevant, “provide information on the settlor and beneficiaries of the bare trust”.
Bare trusts are often used to hold individuals’ real estate assets, and pass taxes and benefits directly to the beneficiary.
The new buyer disclosure requirements were unveiled earlier this week by British Columbia finance minister Michael de Jong, and were seen by some as an early move to appeal to voters ahead of a pending election.
Already, though, critics are saying the policy is flawed and may not accurately gauge the true level of foreign participation in the local housing market, an article in the online Toronto Globe & Mail noted on Wednesday. That’s because many of the homebuyers in British Columbia, though foreign-born, are said to be citizens and permanent residents of Canada already, having arrived over the last few years under such government schemes as a once-popular but now ended immigrant investor programme.
The Globe & Mail quotes a Vancouver immigration lawyer who works with wealthy clients from China as saying that tens of thousands of wealthy “investor immigrants” who have arrived in British Columbia over the years from China, “and [who] continue to arrive, on government programmes….would count as purely Canadian in the government’s analysis, despite earning all of their income abroad and, in some cases, continuing to live abroad while owning properties” in Canada.
Vancouver ‘Canada’s priciest’ market
According to Bloomberg, residential real estate prices in Vancouver are the highest in Canada, and last month topped C$1.3m (US$940m) for the average detached home, a 28% rise over the same period a year earlier. Sales were 32% higher than the previous year, Bloomberg said, citing the city’s real estate board.
Canada closed the door on decades of relatively easy residency for wealthy foreigners in 2014, after stopping accepting new applications to it in 2012. The programme, founded in 1986, had been extensively used by wealthy Chinese immigrants, whose numbers surged in response to such developments as the Tiananmen Square incident in 1989 and the 1997 handover of Hong Kong to Beijing. One much-quoted published report claimed that more than 45,000 of some 59,000 applications pending for the “millionaire visa scheme” were from mainland Chinese.
Since then, a number of countries, including several in the Caribbean, have rushed to embrace wealthy immigrants with their own investor visa arrangements.