The billionaire’s connection with a luxurious house emphasizes the property tax gap CBC News:

A billionaire’s connection to a luxury Vancouver mansion highlights land ownership anomalies that mean property transfers հարկ foreign buyer taxes do not apply to BC. on the purchase of some expensive homes.

CBC: revealed last month that Russian billionaire Yuri Milner was the man who bought the $ 18 million Mille Fleurs mansion in 2013, seven years ago, when the property on the ocean floor was inhabited by Prince Harry և Megan Markle, as they reportedly worked out plans for their royal duties. to refuse. .

But beyond the intrigue over private home ownership, the investigation also highlights the unusual property registration situation that precedes land ownership legislation passed in the 1960s.

In short, Mille Fleurs is one of a number of properties located on a larger plot of land owned by a corporation known as Towner Bay Country Club Ltd., founded in 1929. The larger plot is not divided, և the owners. All of the houses inside it are shareholders of the corporation.

When the house is sold, the individual shares change, but the sale of one lot does not affect the ownership of the larger plot, which means that there is no transaction to register with the Land Ownership Office, resulting in no payment. Property transfer or foreign buyer taxes.

“The Amazing World of Taxes”

There is no assumption that someone did something wrong. it’s just a matter of land ownership over some property.

A similar situation with 1960s apartment buildings in Vancouver West End with real estate agents trumpet in capital letters The fact that the list of multimillion-dollar apartments in the Gulf of England does not include “NO FOREIGN BUYER TAX – NO PROPERTY TAX”.

Megan Markle to Prince Harry in New York in September 2021. On the right, the Mille Fleurs mansion in North Saanich, BC, where the couple stayed in the winter of 2020 as they abandoned their plan to step down from their official duties. (Roy Rochelin / River (left); Sotheby’s (right))

“These things live in their crazy world of taxation,” says Ron Asher. Chief Advisor to the Society of Notaries.

Asher has curiously listed what he calls “historical anomalies,” such as Town Bay and West End apartment complexes, known as cooperatives to add a layer of confusion, but not the same type of rental cooperatives that exist. BC as an affordable apartment.

He says they are probably best described as “housing corporations” created before the 1966 Strata Title Act as a way for people to share ownership of the building where their apartments were located.

Similar property structures exist in older three- to four-story buildings scattered throughout the Lower Continent. Buyers are often surprised to find that there is no strip title on their individual units.

“I think it is possible to mention. “They solved a huge housing problem for a lot of people before we had layers,” says Asher.

“These are the ways in which people buy affordable housing. “These were problem-solving schemes, as opposed to tax evasion schemes.”

“Do not look for strange anomalies in the world”

And Asher’s BC real estate foundation, Professor Jour Somerville, says owning corporate stock has its drawbacks, as opposed to listing your personal property in a land office.

By buying shares, the buyer buys the right to own a house on land owned by a larger corporation, which sets the rules of residence. It is difficult to get a mortgage or other type of financing.

You may not be using Home Buyer Apps for the first time. And then there is the capital gains tax if the property is not your main residence.

Photo from the list of $ 8 million apartment in Vancouver West End. The list trumpets the fact that there is no property transfer tax or foreign buyer tax, as the house is located in a “cooperation” building. (REW.ca)

Somerville says it is hard to imagine tax-prone plutocrats mining in BC. The disadvantages of this radical proposal are small.

“Billionaires, through Panamanian lawyers շ shell companies registered in the Cayman Islands, are dealing with layers of fraudulent corporations,” he said.

“They do not look for strange anomalies in the structure of property around the world, they do not go.”

According to the state Property Transfer Tax Calculator, the $ 18 million property tax payable on a private home will be $ 818,000.

Somerville says that in general, the money lost to the provincial treasury because of land ownership situations that preceded class legislation is pale in comparison to the size of the British Columbia real estate market.

But this does not mean that tax evasion is not a problem or that corporate real estate is not used to evade both taxes and control.

“We are worried about setting rules”

As the former leader of the BC Green Party Andrew Weaver he started talking The need to close state property tax gaps back in 2014! The question still worries him, two years after he left politics.

During his tenure, Weaver turned his attention to a way to single out the title of a real estate title that actually acquires its ownership.

The trustee, often the corporation, is the legal owner of the property, but all decisions regarding its use belong to the so-called real owner.

Former Green Party leader Andrew Weaver left politics in 2020, but he is still passionate about tax evasion. (Mike McArthur / CBC)

At the time of the sale, the new owner will pay any value of the property, plus an additional $ 1 per share for the naked trustee whose name remains on the title, which means there is no need to pay property transfer tax.

Weaver says BC should follow Ontario’s example by linking property transfers to real estate, not just a change of ownership.

“A simple change,” he said.

“It simply came to our notice then. And that’s the biggest problem, does it seem that there is an almost risky disgust with governments setting rules? ”

“We are committed to improving tax models”

Responding to CBC questions about land ownership structures that lead to property transfer tax omissions, the BC Treasury Department said the state is “committed to improving taxation models to address such challenges.”

“One of the first steps in resolving this situation is that we have information about the real owners, including information about their property and ownership structures,” the ministry said in a statement.

The government is pointing to a new register of landowners’ transparency, a database of publicly searches of anyone indirectly interested in the land. The deadline for submitting the first database of its kind in Canada is November 2022.

The ministry says it will use the information “to understand what real property rights are in BC, which will help to continuously improve BC taxation models.”

As for the 27 plots belonging to Towner County Club, then an unexpected trap. presented in 2014when the Northern Saanich district was considering whether its regulations would allow more than one “guestbook” for the entire property, which was eventually not divided.

The solution. By amending the charter to make these plots land registered with the Land Ownership Office.


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