The Province of British Columbia has created the Condo and Strata Association Integrity Register (”CSAIR”) to track assignments of pre-construction condominium purchase and sale agreements.
Effective January 1, 2019, condominium developers are required to collect the terms of the assignment and the names and social insurance numbers of the parties to the assignment and report this information to CSAIR. Developers are required to include in their purchase agreements a notice informing purchasers that this information will be collected and reported to the government.
The B.C. government intends to provide the information collected to the Canada Revenue Agency to ensure that assignors are paying the appropriate income tax on the income generated from the assignment. The information collected will also be used by the B.C. government to ensure that land transfer tax is paid on the full purchase price, including any assignment amounts. As assignments of purchase and sale agreements are not registered on title, before the creation of CSAIR, there was no way for the government to track these assignments. This allowed many condo flippers to make money on the assignments without paying taxes on the income earned from the assignments.
“We will not allow real estate speculators and tax frauds to take advantage of loopholes in the system any longer, and this register sends a clear message. The days of avoiding taxes through condo flipping are over,” said Carole James, Minister of Finance for British Columbia. “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.”
The creation of CSAIR is just one of a number of measures implemented by the BC government to address skyrocketing prices of residential homes and a shortage of affordable homes for B.C. residents.