Ontario Introducing Housing Affordability Measures for Homebuyers and Renters

Friday, April 21, 2017

INITIAL ASSESSMENT BY SECUREFACT ADVISORY SERVICES TEAM

QUESTIONS? Contact us to talk to a member of Securefact's Advisory Team.

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Ontario Government measures to cool down the speculation in the real estate sector are consistent with FINTRAC requirements and the recent Federal Budget announcement on beneficial ownership transparency.

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Today the Ontario government revealed long awaited measures to cool down the housing market. Several measures have been suggested including the introduction of a tax on foreign buyers and certain rent control measures.

However, from an anti-money laundering perspective it is indeed encouraging to note that the Ontario government will be collecting from home buyers more information on completion of land registration documents. These requirements will take effect from Monday, April 24, 2017.

For example, home buyers will be required to provide information on:

  • Where they currently live
  • Their citizenship and permanent residency status
  • Intention of living in a home as their principle residence or as an investment and,
  • If property is bought by a corporation, who owns or controls the corporation

These measures support the FINTRAC guidelines for real estate firms to ensure adequate due diligence on their customers is performed as part of their anti-money laundering risk management requirements.

The guidelines issued by FINTRAC have been reiterated in their real estate sector operational brief issued on November 14, 2016.

RELATED: Canadian Real Estate Industry on FINTRAC Watch List

Furthermore, the new measure for the determination of the beneficial owners of entities purchasing real estate is consistent with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The Proceeds of Crime (Money Laundering) Act (PCMLTFA). The law specifies the type of information that must be collected:

a) Corporations:  The names of all directors of the corporation and the names and addresses of all persons who own or control, directly or indirectly, 25 per cent or more of the shares of the corporation;

(b) Trusts: The names and addresses of all trustees and all known beneficiaries and settlors of the trust

In summary, information establishing the ownership, control and structure of the entity must be obtained in sufficient detail for regulatory scrutiny.

Indeed, the Federal government announced in the Federal Budget on March 22, 2017 to have a national strategy for improving the availability of beneficial ownership information.

RELATED: Ontario Corporations Now Required to Keep a Register of Real Property Interests in Ontario.

We hope that these measures will not only help Canadians with affordable housing, but will also deter real estate speculators and money launderers from tainting the industry.

QUESTIONS? Contact us to talk to a member of Securefact's Advisory Team.

MEDIA COVERAGE

  • Re/Max Integra CEO Pamela Alexander discusses the Fair Housing Plan [CTV News]

SOCIAL MEDIA