From: AlanBaggett@volcanomail.com   
      
   Canada Revenue Agency Uncovers Nearly $600 Million In Unpaid Taxes On B.C.,   
   Ontario Real Estate  :CRA SOTW   
      
   But this could just be the tip of the iceberg.   
      
    By Daniel Tencer    
      
   Canada Revenue Agency has identified nearly $600 million in unpaid taxes on   
   real estate transactions since it began keeping a closer eye on the British   
   Columbia and Ontario real estate markets in 2015, the agency said in a recent   
   report.   
      
   However, much of that money has to do with CRA rejecting GST/HST rebates to   
   homebuyers.   
      
   Of the $592.6 million in additional taxes the agency identified, roughly half   
   had to do with claims for GST/HST rebates that it said were unjustified.   
   Buyers of new or significantly refurbished properties have to pay GST/HST, but   
   there is a partial    
   rebate available to those buying a principal residence.   
      
   But the CRA also found unpaid income taxes on real estate transactions —   
   about $76.8 million in unpaid taxes in B.C., nearly twice as much as the   
   agency found in Ontario ($39.5 million), despite Ontario's considerably larger   
   population.   
      
   "Since 2015, the economic factors in the Greater Toronto Area and the Lower   
   Mainland of British Columbia, such as high-valued markets combined with rapid   
   price increases, have further increased the risk of tax non-compliance," a CRA   
   spokesperson told    
   HuffPost Canada in an email.   
      
   The amount of unpaid taxes identified by the agency has been on the rise. The   
   agency found some $102 million more in unpaid taxes during the 2016-2017   
   period than it did in the year before that, and penalties have been on the   
   rise as well, totalling $43.   
   1 million since 2015.   
      
   CRA did not provide numbers on how much of this money owed has been collected.   
      
   The agency says its main focus in this area has been on property flipping;   
   unreported GST/HST on the sale of new or refurbished properties; unjustified   
   housing rebate claims; and "questionable sources of funds/worldwide income."   
      
   However, the CRA report did not provide data on whether any unpaid taxes were   
   found due to "questionable sources of funds." And the agency's numbers, which   
   look at taxes owed on real estate transactions, provide little insight into   
   some of the more    
   egregious allegations of wrongdoing in Canada's hottest housing markets.   
      
   Anti-corruption groups such as Transparency International (TI) have been   
   warning that British Columbia's real estate market in particular is becoming a   
   hotbed of money laundering. They say Canada has deficiencies in its real   
   estate regulations that allow    
   illicit money to flow into the housing market, potentially inflating prices.    
      
   As of 2016, the government did not know who actually owned half of Vancouver's   
   100 priciest homes, a TI report said.   
      
   But things are changing in this regard. British Columbia's provincial   
   government announced plans earlier this year to require the "beneficial owner"   
   of a property to be named. In other words, owners of residential real estate   
   will find it much harder to    
   hide behind numbered companies or intermediaries in order to obscure who   
   really owns a property.   
      
   And starting this year, Canada will begin sharing tax information with at   
   least 90 countries that have signed on to an initiative from the OECD called   
   the "Common Reporting Standard." Among those countries is China, from which   
   hail many of B.C. and    
   Ontario's foreign buyers of real estate.   
      
   That is a "huge" development, Vancouver immigration lawyer Richard Kurland   
   said.   
      
   "It's valuable for Canada because it gives (the country) more access to more   
   personal financial information than ever before from China," Kurland told the   
   Globe and Mail.   
      
   But that access is a two-way street, and some civil liberties advocates in   
   Canada have raised privacy concerns about the new program.   
      
   "The big concern is that Canada would be unwittingly participating in a star   
   chamber investigation and prosecution of somebody in another jurisdiction, or   
   that Canadians would in essence be thrown under the bus and information would   
   be shared with other    
   jurisdictions that don't have our due process and constitutional protections,"   
   said Michael Bryant, executive director of the Canadian Civil Liberties   
   Association (CCLA).   
      
   The CCLA criticized the Liberal government for quietly introducing changes to   
   the law in this year's budget that will allow for government agencies to share   
   financial data with other countries.   
      
   The Liberals' budget documents said the changes are "vital to the global fight   
   against serious crime and (are) consistent with the government's commitments   
   to address global tax evasion and improve the fairness of the tax system."   
      
      
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