VANCOUVER—New data released by Statistics Canada shows where B.C.’s biggest hubs of “transnational” real estate marketplaces are located, with the resort municipalities of Sun Peaks and Whistler and the University of British Columbia Endowment Lands showing the highest rates of non-resident ownership.

The data also indicates how much real estate is held by corporations rather than individuals, a measure that’s useful as British Columbia moves to crack down on corporate structures that can be used to avoid tax, said Nathanael Lauster, a sociology professor at UBC who studies housing.

“I think the more transparency we can bring to some of these ownership issues the better off we’ll all be,” said Lauster.

Statistics Canada began tracking non-resident ownership data in 2017 after repeated calls from activists and academics who believe that non-resident property purchases were one factor in the huge and widening gap between Vancouver property prices and local incomes.

The statistical agency released the first batch of data in December 2017, showing that 7.1 per cent of property in Vancouver is owned by non-residents, which StatsCan defines as anyone whose principal residence is outside of Canada.

The data shows that Sun Peaks has the highest rate of non-resident ownership, at 17 per cent, with Whistler not far behind at 16 per cent. Non-residents own 14 per cent of property in Electoral Area A, which is mostly made up of the UBC Endowment Lands.

“Out of that 16 per cent (for Whistler), it’s about 1,900 units that are non-resident occupied,” said Andy Yan, director of the City Program at Simon Fraser University. “What it really gives to you is the type of marketplace that is a global one … It touches upon the ongoing challenges of housing in Whistler and Sun Peaks as workers in those cities can’t compete with this non-resident marketplace.”

Vancouver, West Vancouver and Richmond also scored relatively high (7.1 per cent, 6.5 per cent and 7.1 per cent), but so did other municipalities that are popular vacation destinations like Tofino, Fernie and Revelstoke (7.5 per cent, 6.6 per cent and 5.2 per cent).

The data shows that around six per cent of real estate in Vancouver is owned by residents through corporations (42,532 properties), compared to four per cent in Toronto. Corporate ownership is much higher outside of major metropolitan areas; one factor could be that many vacation properties are held in family trusts, Lauster said.

The percentage of corporate-owned properties is much lower for non-resident owners, but Lauster says there’s little reason for a non-resident property owner to create a corporation outside of Canada to hold real estate. Instead, “you would set up the corporation as though it was a Canadian corporation.” By selling shares in the corporation, the property can be transferred without paying B.C.’s property transfer tax (foreign buyers must pay an additional 20 per cent transfer tax).

That’s the scenario Transparency International warned about in an opinion piece in the Globe and Mail on Dec. 27, 2017.

“Anyone who estimates the amount of foreign ownership of real estate in Canada will be wrong,” James Cohen, the director of the anti-corruption watchdog, wrote. “Everyone will be wrong because in Canada, a foreign investor can pour money into Canadian real estate through a Canadian company they set up either federally, provincially or territorially, using a Canadian as a nominee director/shareholder/beneficiary, without disclosing the true beneficial owner.”

A 2016 Transparency International study found that “nearly half of the 100 most valuable residential properties in Greater Vancouver are held through structures that hide their beneficial owners.”

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In an effort to crack down on tax evasion, the B.C. government intends to introduce a public registry to pull back the veil on who owns real estate.

“This registry will be the first-of-its kind in Canada and will provide valuable information about the true ownership of real estate in B.C.,” according to a government white paper.

“It will hold public records on the individuals behind numbered companies, offshore and domestic trusts, and corporations. As a result, the registry will help give tax auditors, law enforcement agencies and federal and provincial regulators the information they need to conduct their investigations. It will also help those government agencies to crack down on tax frauds and those engaged in money laundering.”

B.C.’s Attorney General David Eby will release a report Wednesday on money laundering problems in the province’s government-regulated casinos. The author of the report, former civil servant Peter German, is working on a second report focused on money laundering in real estate.

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