January 6, 2021 Category News
The Land Owner Transparency Act (LOTA) is a recent legislative development aimed at ending hidden ownership of land in order to combat tax fraud that drives up BC’s real estate market.
To achieve land transparency, LOTA introduces mandatory reporting of indirect ownership of land. The reported information is held in the Land Owner Transparency Registry (LOTR), a searchable database open for public access. The requirement applies to all transferees, or individuals to whom an interest in land is transferred.
As of November 30, 2020, LOTA requires all transferees to file a transparency declaration when making an application to register an interest in land. A transparency declaration states whether the transferee is a reporting body. If the transferee is a reporting body, a transparency report must also be filed.
Who is a Reporting Body?
Under LOTA, there are three types of reporting bodies: a relevant corporation, a trustee of a relevant trust, or a partner of a relevant partnership.
Relevant corporation means a corporation or limited liability company. LOTA provides a number of exemptions, including strata corporations, government bodies, schools, and corporations owned by an Indigenous person.
Relevant trust means an express trust, including a bare trust, as well as legal relationships created in another jurisdiction that are similar to an express or bare trust. LOTA provides a number of exemptions to relevant trust as well, including charitable and testamentary trusts.
Relevant partnership refers to all forms of partnership within the meaning of the Partnership Act. The definition also covers legal relationships created in another jurisdiction that are similar to a partnership under the Partnership Act.
A reporting body must file a transparency report in addition to the transparency declaration. A transparency report sets out identifying information about the reporting body and its interest holders, including the interest holder’s residence for tax purposes and a description of interest held in the reporting body.
A new transparency report must also be filed any time there is a change to the reporting body or interest holder’s information. Existing reporting bodies with an interest in land must file a transparency report by November 30, 2021.
If you require advise or have questions relating to these changes, please contact us.