VANCOUVER—To crack down on tax evasion, the B.C. government has launched a new registry requiring developers to report on presale condo and strata lot contracts.

Starting Jan. 1, 2019, developers selling strata units before a building is completed will be required to report information on the online Condo and Strata Assignment Integrity Register that the B.C. government will share with the Canada Revenue Agency.

Minister of Finance Carole James said in a statement Monday that this will close the “loopholes” that have allowed real-estate speculators and tax frauds to exist in B.C. because there is no method for tracking whether sellers are paying taxes on their capital gains. According to the ministry, tax evasion on presales makes sales more profitable and pushes home prices up.

With a registry, the transactions can be traced back to the seller’s income tax return to identify whether or not they reported the gains.

“The days of avoiding taxes through condo flipping are over. This register will help bring fairness and integrity back to B.C.’s real estate market, so that people can afford homes in the communities where they live and work,” said James.

The information required from developers include identity and citizenship of all parties in the contract, their contact information, strata lot number, purchase price of the condo unit, and the amount paid for the presale contract.

The CRA recently reported it had identified nearly $600 million in unpaid taxes from the British Columbia and Ontario real estate sector from audits conducted over the past three years.

In B.C., 45 per cent of the unpaid taxes came from not properly reporting income.

When it comes to income tax, property owners are often getting into trouble because they’re not properly reporting the capital gains made from flipping property, said Jamie Golombek, managing director of tax and estate planning at CIBC in Toronto.

The first reporting period ends March 31, 2019, and the report is due on April 30, 2019.

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With files from Jen St. Denis

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