For every policy change, different players of the real estate industry like investors, speculators, buyers, and construction management companies, among others, will have various, and possibly contradictory, reactions. This is because the said policy changes can affect them in different ways.
With the continuing challenge of rising housing prices in Canada, different groups have been proposing and taking actions to curb the terrible effects of this crisis. An example is the 30-point plan for housing affordability made by the British Columbia government. This plan contains five umbrella pointers:
- Stabilizing the market
- Cracking down on tax fraud and closing loopholes
- Building the homes people need
- Enhancing security for renters
- Supporting partners to build and preserve affordable housing
Under the second umbrella is “taking action to end hidden ownership”. As of June this year, the BC government is paving the way for the legislation of cracking down hidden ownership.
Meanwhile, the 30-point plan report had also detailed the possibilities of this movement. One major part of the plan includes the establishment of registry containing information on beneficial land ownership in BC. This will be administered by the Land Title Survey Authority.
Problems in the Past
Reports have been quoting finance minister Carole James talking about British Columbia’s reputation as an attractive location for anonymous investing and hidden wealth. This is definitely a slight plummet for the real estate industry as a whole. Not only does this taints its façade but also has real implications like ones involving fraud.
Effects on the Players
The said legislation can be a boon or a bane for different real estate players. While everybody will definitely have extra labors brought by the registry establishment, taking the extra mile might actually be worth it for others, while a double whammy for others. Below are some of the players and the possible effects of the registry on them.
This is still an umbrella term for different people. Some investors will be happy while others won’t. Those who won’t be happy about the stricter measures are the ones involved in money laundering, fraud, and dummy ownership.On the uncertain side will be the foreign investors, who are implicated by some critics as reason for shooting housing prices in Canada. With the pending discussions on how to deal with foreign real estate investors, being transparent about their identity can be a double-edged sword for them.
Additional tax burden for speculators has been on the roll. Hence, those who are still trying to avoid this through hidden ownership are up for this crack down initiative, if the practice won’t cease still.
Buyers will be affected in many ways, which are generally advantageous. One, since the registry can help hunt down speculators, indirect effect on pricing can be expected. In theory, fewer speculators can contribute to the increase of housing or rental supply and can tone down the soaring pricing. Another advantage is lowering the chances of dealing with fraudulent land or property owners in BC.
- Construction Management Companies
These players are also susceptible to fraudulent real estate players, in as much as buyers are. While the concern for ordinary folks would be financial hassle, construction management companies would care about the possible effects of transactions with frauds to their reputation. Such companies can definitely exert their own efforts in screening their clients and other players they transact with, but having this registry will take this burden from them.