If you own land in BC through a company, trust, or partnership, there’s a good chance you need to file a Land Owner Transparency Report by November 30, 2022!
Don’t miss the LOTA deadline!
The Land Owner Transparency Act and Report FAQ
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What is the Land Owner Transparency Act ("LOTA")?
The Land Owner Transparency Act (“LOTA“) creates a publicly searchable registry of information about “interest holders” under the LOTA. These are certain individuals with indirect ownership in land, usually though a corporation or trust.
The deadline to file the mandatory Land Owner Transparency Report is November 30, 2022. What is the Land Owner Transparency Report?
The Land Owner Transparency Report is a mandatory filing for “reporting bodies” that own land in British Columbia. A reporting body is either a corporation, trustee, or partnership. The transparency report is a new requirement in British Columbia, and first of its kind in Canada, mandated by the Land Owner Transparency Act (LOTA), as of November 30, 2020. Now, reporting bodies are required to file the Land Owner Transparency Report (“LOTR“) at the time of registration of land in their name. For reporting bodies that owned land before November 30, 2020, the deadline to file the transparency report is November 30, 2022. The information from the transparency reports will be used to maintain a publicly searchable database called the Land Owner Transparency Register. The purpose of the Land Owner Transparency Register is to increase transparency about land ownership in British Columbia by creating a registry of individuals who own land through corporations, trusts, and partnerships.
Why does British Columbia require a Land Owner Transparency Report ("LOTR")?
When the LOTA was introduced in the legislative assembly in April 2019, the government’s rationale was:
“For years, people were able to use shell companies, trusts and partnerships to hide who really owns property in British Columbia. The act sets out a framework for increasing transparency of land ownership in the province by requiring disclosure from corporations, trustees and partnerships about the underlying owners of land. To support greater transparency, high-level information will be available for search publicly, similar to how you can search now for information on individual titleholders. More sensitive information will be available to law enforcement, tax authorities and certain regulators to help address tax evasion, tax fraud and money laundering. This beneficial ownership registry will be the first of its kind in Canada and one of the most comprehensive in the world.”
What is an "interest holder" in a LOTR?
The purpose of a LOTR is to identify individuals who own land in British Columbia through corporations, trusts, and partnerships.
LOTA applies to “interest holder”, including registered ownership of a property, leases with a term of more than ten years, and a right under an agreement for sale to occupy land or to require a transfer of the land. The LOTR must be completed and filed on or before November 30, 2021 unless the interest is transferred to another person before this date.
A key step in completing the LOTR is determining the interest holders
What are “Interest holders”
- Corporate interest holders: people who own, directly or indirectly, 10% or more of the issued shares or voting shares, or have the right or ability to elect, appoint, or remove the majority of the directors
- Trust interest holder: certain people and corporations who have power over, or are beneficiaries of trusts that have an interest in land,
- Partnerships interest holders: people and corporations who are partners in a partnership.
What is an "interest in land"?
Interest holders but have a specific interest in land. What exactly is an “interest in land”? An interest in land includes any of the following:
- Fee simple (standard ownership)
- Life estate
- Leases and Subleases (and modifications) over 10 years
- Right to Purchase
- Transmission to Executor or Administrator
- Transmission to Surviving Joint Tenant(s)
- Vesting by Court Order
- Crown Grant
What information from a LOTR is publicly available?
There are two tiers of availability of the information collected through the LOTR:
- Available to the general public: most of the information contained in a LOTR. However, people can apply to have certain personal information removed from the publicly accessible registry under certain circumstances including health and safety concerns, individual who are minors, or individuals unfit to handle their financial affairs.
- Available to government entities only: Certain organizations have unfettered access to all LOTR information including the Registry itself, the Land Title Office, CRA, police, the BC Financial Services Authority, and FINTRAC.
How do you file a LOTR?
A LOTR must be filed electronically by a legal professional, meaning a lawyer or notary public.
How much does a LOTR cost to create and file?
Arora Zbar LLP routinely advises clients on real estate transactions, including LOTA requirements. We can provide comprehensive advice, if needed, on matters such as corporate reorganization or trust creation. Together with the convenience of virtual services, we also offer transparent pricing. A LOTR starts at just $400 (including taxes and out of pocket expenses) for a simple LOTR, meaning a report concerning one property with one interest holder. There’s an additional $250 for each additional property and interest holder within the same report. For complex holding structures, we’re able to provide pricing in advance after a preliminary review of the structure and relevant documents.
To better understand our pricing, consider the following examples:
- Mr. Sidhu owns 100% of a holding company that owns one property. The cost of the report will be $400
- Mr. Sidhu owns 100% of a holding company that owns two properties. The cost of the report will be $650
- Mr. and Mrs. Sidhu each own 50% of a holding company that owns two properties. The cost of the report will be $900
- For a group of five people who each own 20% of the shares in a company that owns one property, the cost of the report will be $1,400.
While the deadline to file the transparency report is November 30, 2022, we recommend that you contact us as soon as possible, especially if your land holding structure is complex, by contacting us today.
What happens if you don’t file a mandatory LOTR?
Failure to file the LOTR may lead to a penalty of up to the greater of:
- $25,000 for individuals or $50,000 for a person other than an individual (e.g. relevant corporation); or
- 15% of the assessed value of the property
There are comparable penalties for failure to take reasonable steps to ensure information in a transparency report is accurate.