In keeping with their mandate to require increased transparency from purchasers of real property, the British Columbia Provincial Government (the “Government”) has recently enacted the Information Collection Regulation (the “Regulation”). The Regulation will become effective on September 17, 2018, and will require disclosure of personal information about individuals with a significant interest in a corporation, and beneficiaries of a trust, that acquires property in British Columbia.
Effective September 17, 2018, corporations that acquire property must identify all individuals with a significant interest therein, and express trusts must identify all beneficiaries thereof, on property transfer tax returns, unless the trust or corporation falls under an exemption in the Regulation.
An individual is deemed to be a “corporate interest holder”, with a significant interest in a corporation, if the individual:
- has direct or indirect control or ownership of shares representing 25% or more of the value of the equity of the corporation;
- has direct or indirect control or ownership of shares, representing 25% or more of the voting rights with respect to the corporation;
- has a right to appoint or remove the majority of the corporation’s board of directors; or
- can exercise significant influence or control over the relevant corporation.
At this time, it is unclear how courts and the government will interpret what “significant influence or control” entails.
Once the corporation or trust has identified and disclosed the relevant individuals, it will also have to include the following information, relating to each individual, in its property tax return:
- Date of birth;
- Citizenship information;
- Contact details; and
- Social insurance number or tax number (as applicable).
Evidently, the Regulation poses an added layer of transparency and complexity to real estate transactions. Accordingly, if you need assistance with property transfer tax issues, or your real estate transaction, please do not hesitate to contact our Commercial Real Estate group.