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Land Owner Transparency Act- How Am I Impacted?

Land Owner Transparency Act- How Am I Impacted?

In November 2020, BC’s new Land Owner Transparency Act (LOTA) came into force. The act creates new disclosure obligations for owners of real estate in the province, meaning that it has a very broad scope and will impact many people. Continue reading for more information on the act, and what it means for you as a home owner or real estate investor.

What is the purpose of the act?

The Government of BC has created the LOTA with the stated purpose of preventing tax evasion, money laundering, and real estate fraud. This comes amidst an ongoing housing crisis and the publishing of several studies and news articles which suggest that BC’s real estate market is particularly vulnerable to financial crime. The act specifies that applications to the BC Land Title office must register interests in land, such as the standard fee simple ownership interest, and must complete a transparency report. This report is meant to disclose whether a transferee (the person receiving the land title through the transfer) is a “reporting body” under the act. A ‘reporting body’ under the act, can include any person or entity holding the land title under a corporation, under a trust, or through a partnership. This is to prevent individuals from deliberately obscuring their identity purchasing and holding land in order to commit financial crime.

If the transferee is considered a reporting body under the act, they will have to complete an additional transparency report to disclose information on all of the relevant interest holders. For example, if I own property through my family business, which my children each own shares in, I am obligated to disclose their details while registering my interest in the land.

Will I be affected?

This act will become relevant in many people’s estate planning process, as it is common to hold large assets such as real estate in a trust account for beneficiaries. Under the act, these beneficiaries are indirect owners who must be disclosed. For example, if you create a trust account to hold real estate, you are transferring the interest in land away from yourself and in to the trust. This transfer will be reflected on the land register, and the trust is a reporting body under the act. In completing the transfer application, you will have to file a transparency disclosure with details on the beneficiaries of the trust.

Those selling their homes or transferring property into an estate should make sure they have disclosed the necessary information under the new act.

This may sound complicated, but it should not discourage you from considering using trust instruments in your estate planning. There can be many benefits to your estate and beneficiaries by using trusts to distribute your assets. For more on this, read our article on inter vivos gifts.

What do reporting bodies have to do?

If you’re concerned that your real estate holdings or your estate plans will be impacted by this act, it is always a good idea to get legal advice. Simply, when you transfer the land title of your property, either through sale or as part of your estate planning, or for some other personal reason, it is likely that you will have to fill out new forms for the land register as a result of the act. The information you share in the disclosure will depend on the type of transferee- the person or entity receiving the land title. Let’s look at some examples. If the transferee is…

  • A trust: Information on both the trustee, the settlor, and any beneficiaries is required.
  • A corporation: The name of the company, the address(es) it’s registered to, its corporation number and business number is required.
  • Individuals: Name, birth date, social insurance number, home address and even information on their relationship to the reporting body will be necessary.

As you can see, the information required by the Land Owner Transparency Act is not intrusive and does not pose any new challenges to people buying/selling property in British Columbia. If you’re still unsure of how this act will impact you or your estate plan, contact an experienced estate lawyer today. We’ll make sure you’re on the right track.

Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

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