Reminder #1: Additional property transfer tax is payable for foreign nationals, foreign entities and taxable trustees
In recent years, LIF has received an increased number of claims against lawyers relating to additional property transfer tax. In those claims, lawyers forgot that a foreign national, foreign corporation or taxable trustee is required to pay additional property transfer tax on certain real estate transactions.
In this re-released video, Marlon Song, Claims Counsel at LIF, shares the common traps that will help you avoid a claim. The Ministry of Finance has also asked us to provide you with this reminder.
Reminder #2: File your Land Owner Transparency Reports by November 30
The deadline for pre-existing “reporting bodies” to file a transparency report with the Land Owner Transparency Registry (LOTR) was extended to November 30, 2022.
Lawyers who act for a relevant corporation, a trustee of a relevant trust, or a relevant partnership that acquired an "interest in land" prior to November 30, 2020, and continue to own an interest, should keep in mind that a transparency report can take some time to complete. Wherever possible, have your client execute the report rather than you. Also note the current obligation to file a transparency declaration by a transferee applying to register an interest in land, and if a transferee is a “reporting body,” to also file a transparency report.
For information about the offences and fines for a reporting body’s failure to file a transparency report see Disclosure by existing landowners. Visit the LOTR’s web page on policy help, the government’s web page for enforcement information and resources regarding interpretation, and subscribe here to receive emails with the most recent updates.
Reminder #3: Foreign buyers are banned from purchasing Canadian residential property as of January 1
The Prohibition on the Purchase of Residential Property by Non-Canadians Act (the "Act"), in force January 1, 2023, prohibits the purchase of residential property by non-Canadians. Every non-Canadian who contravenes this prohibition and every person or entity that counsels, aids or attempts to counsel or aid a non-Canadian to purchase, directly or indirectly, any residential property is guilty of an offence and liable on summary conviction to a fine of not more than $10,000 (see section 6). Note that a charge or fine is not covered under your LIF policy. In addition to the penalties, the Minister may apply to court for an order to sell a property that has been purchased in contravention of the Act. It appears that this prohibition will be in effect for two years, subject to any amendments. Learn more here.