Wednesday, March 24, 2021

In an effort to stop the ‎hidden ownership of real ‎‎estate and prevent money laundering and tax evasion, the BC government introduced the Land Owner Transparency Act (LOTA) and regulation, and created the Land Owner Transparency registry. The registry holds the names of corporations, partnerships, or trusts that own all or part of a piece of land in BC.

Starting November 30, 2020, new applications to acquire land through a corporation, partnership, or trust, must file a declaration As of November 30, 2020, when an application is made to acquire an interest in land directly or indirectly through a corporation, partnership or trust, each transferee must file a declaration.

As of November 30, 2021, all existing reporting bodies holding interests in BC land had to file a transparency report.

An interest in land includes fee simple, life estates, leases with a term or remaining term over 10 years, and holders of a right to occupy being registered in the BC land Title and Survey Authority (LTSA).

LOTA and the regulation apply to residential and commercial lands.

When are LOTA disclosures required?

Triggering event Disclosure required
Registration On application to register a legal interest in land, a two-tiered obligation is triggered:  
1. Each transferee must file a transparency declaration indicating if they are a reporting body and, if so, which type;  
2. A reporting body must also file a transparency report disclosing specified information about each interest holder.
Pre-existing owner(s) Reporting bodies that own an interest in land when LOTA comes into force will have to file a transparency report by November 30, 2021 (LOTA Regulations 549 s.19).
Change in interest holder(s) Each time the interest holder(s) in a reporting body change, the reporting body must file an updated transparency report.
Registered owner ceases to be a reporting body A Reporting Body Notice to Administrator is required if corporation, trust, or partnership ceases to be relevant corporation, relevant trust or relevant partnership.

Reporting bodies

Relevant corporations Relevant trusts Relevant partnerships

All private corporations and LLCs, unless excluded by Schedule 1 of the Act.

Exclusions include:

  • Strata corporations
  • Government bodies
  • Schools

All express (intentional trusts) unless excluded by Schedule 2.

Note: bare trusts (nominees) are relevant trusts.

Exclusions include:

  • Testamentary trusts
  • Charitable trusts 
  • Public Guardian Trusts
  • Real Estate Investment Trusts
 All partnerships.

Interest holders

Reporting body Interest holder Characteristics
Relevant corporation Corporate interest holder

Any of:

  • owns or controls, alone or with others, directly or indirectly, 10%+ of the equity (typically shares) or voting rights
  • has the right, directly or indirectly, to appoint or remove a majority of the directors
Relevant trust Beneficial holder

Any of:

  • a beneficial interest in the interest in land
  • power to revoke the trust and receive the interest in land
  • a corporate interest holder of a corporation that has a beneficial interest in the land or the power to revoke the trust and receive the interest in land.
Relevant partnership Partnership interest holder

Any of:

  • a partner in the relevant partnership;;
  • a corporate interest holder of a corporation who is a partner in a relevant partnership.

 

A person (individual or entity) that controls a partnership includes ‎any partner of the partnership, but not limited partners.

Limited partnerships - a person entitled to at least 25 per cent of the ‎profits of the partnership assets; on wind up is entitled to at least 25 per cent of the assets; ‎has at least 25 per cent of the votes in the partnership management, or has the right to appoint or remove the ‎majority of the partnership’s management.

No longer a reporting body

When a registered owner of an interest in land stops being a reporting body, they must file a notice with the LTSA.

Transparency report information required

Entity Primary identification information
Individual (trustee or settler of relevant trust)
  • Full name
  • Citizenship or permanent resident
  • City and province/country of residence
Corporation or LLC
  • Name and registered office address and head office address, if applicable  
  • Jurisdiction(s) of incorporation
  • If continued or transferred into another jurisdiction, the jurisdiction into which the corporation or company was most recently continued or transferred
Partnership
  • Registered business name, if any
  • Type of partnership (LP, general)
  • Registered and/or head office address, as applicable
  • Jurisdiction of laws which govern the partnership

 

Interest holders: full name, date of birth, social insurance number, tax number, location of principal residence and last known address; date on which one became or ceased to be an interest holder and the nature of the interest in the reporting body; Canadian citizen/permanent resident, or neither.

Not made public

SINs, residential addresses, and other sensitive information will not be made ‎public in the registry.

Exemptions

Crown corporations, local governments, schools, publicly traded corporations, strata corporations, insurance companies, trust companies, savings institutions, and corporations owned by an Indigenous Nations.

Penalties for non-compliance

1. Failing to file a transparency report or provides false or misleading information in a transparency report

  •  individuals: fines up to $25,000 or 15% of the ‎assessed value of the property; and
  •  non-individual: up to $50,000 or 15% of the assessed value ‎of the property for a non-individual.

2. Other offences

  •  individuals: a fine up to $50,000; and
  • corporations or other entities: a fine up to $100,000.

LOTR facts

  • LOTR will be available online by April 30, 2021 through the LTSA.
  • It’s a publicly searchable database of information from transparency reports filed, which disclose information about the transferee and indirect or owners (interest holders) of the interest in land through corporations, partnerships, and trusts.
  • The registry will be searchable by PID, name of owner, name of corporation, trust, partnership.

The information in filed transparency reports will be available to the Canada Revenue Agency, the RCMP, the BC Securities Commission, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), and tax authorities of other jurisdictions if Canada has an arrangement, written agreement, or treaty with that jurisdiction.