Some buyers hold real estate through a corporation, a family trust or a nominee, for estate planning, privacy, liability or business reasons. It can make sense, but in BC it’s no longer a way to stay anonymous, and it changes how several taxes and exemptions apply. This is an overview of what to discuss with your lawyer and accountant before you buy, not advice on whether to do it.
Ownership is no longer private
BC’s Land Owner Transparency Act requires corporations, trustees and partnerships that hold land in BC to file a transparency report with the Land Owner Transparency Registry, run by the Land Title and Survey Authority (LTSA). The report names the individuals behind the entity: shareholders with significant interests, trust beneficiaries and others with control. A report is filed when the entity acquires land, and updated as things change. The registry is a searchable public database, and the Province enforces compliance.
The property transfer tax return also asks about the people behind a trust or nominee purchase. In short, the people who really own a property in BC are on record.
How taxes and exemptions change
- Property transfer tax. A company or trust pays property transfer tax like anyone else. The first-time buyer and newly built home exemptions are for individuals, so they generally won’t apply. See Property transfer tax, explained.
- The additional 20% tax. If the corporation is a foreign corporation, or the trustee is a “taxable trustee”, the additional property transfer tax for foreign entities can apply in Metro Vancouver.
- Principal residence exemption. A home owned by a corporation generally can’t be anyone’s principal residence for tax purposes. Trusts have their own, narrower rules.
- Home owner grant. Generally available only to individuals who live in the home.
- Speculation and vacancy tax. A company or trust declares each year with the details of the people behind it: corporate interest holders, beneficial owners and partners. It qualifies for an exemption only if those people meet the same requirements an individual owner would. See The speculation and vacancy tax, explained.
- Selling later. How the gain on a sale is taxed depends on the structure. Ask your accountant before you buy, not when you sell.
Financing and practicalities
- Mortgages. Lenders treat corporate borrowers differently: larger down payments, personal guarantees and different rates are common.
- Insurance. Make sure the policy names the right owner and reflects who lives in the home.
- The contract. The buyer named in the contract of purchase and sale should match how title will be taken. If a company hasn’t been set up yet, your lawyer can advise on wording.
- Federal rules for non-Canadians. A corporation controlled by non-Canadians can be caught by the federal ban on purchases of residential property. See Buying in BC from outside Canada.
Questions people ask
Can I keep my name off title by using a company?
The company’s name goes on title, but the people behind it are reported to the Land Owner Transparency Registry. It isn’t anonymous.
Is a bare trust treated differently?
Land held in trust, including a bare trust, generally still needs a transparency report naming the people behind it; confirm with your lawyer. Federal tax reporting for bare trusts has also changed in recent years; ask your accountant what applies now.
Is it cheaper to buy the company that owns the property?
Share purchases raise their own legal, tax and due diligence questions, and the rules have tightened. It’s a question for your lawyer and accountant, case by case.
General information only, current as of publication. It isn’t legal, tax or financial advice. Get independent advice from a lawyer and an accountant before buying through a company or a trust.