Vancouver Real Estate Blog

The Federal Proceeds of Crime(Money Laundering) and Terrorist Financing Act

Yesterday I was asked by a client why I needed to collect personal information, when I never asked for it the last time I sold his property. My answer to him was simple. IT'S THE LAW. Then I went into why it became law and who else has to go through the same procedures.

On June 23, 2008 new federal money laundering and anti-terrorist financing regulations came into effect that require REALTORS®to collect personal identification information from buyers and sellers. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) as I know it keeps all this information and tracks everything. Here is a list of others that also follow the same procedures.

Who must report to FINTRAC

In addition to REALTORS®, other professionals and organizations are also required to ask for your personal information, including:

• financial entities including banks, credit unions, trust and loan companies and agents of the Crown that accept deposit liabilities
• life insurance companies, brokers or agents
• securities dealers, portfolio managers and investment counsellors who are provincially authorized
• persons engaged in the business of foreign exchange dealing
• dealers in precious metals and stones
• money services businesses
• accountants and accounting firms when carrying out certain activities on behalf of their clients
• casinos
• individuals and any entity importing or exporting currency or monetary instruments (such as a money order) of $10,000 or more
• lawyers and notaries public
• real estate developers and builders

For additional information about this federal initiative, please visit FINTRAC's website or call toll-free 1-866-346-8722

A Great Real Estate Law Resource

  Lloyd Duhaime's legal website, Duhaime.org, and his legal blog, LawMag, have lots of pertinent and helpful real estate legal information.  Check out the Real Estate & Tenancy section of the website here for a comprehensive list of legal topics, including Residential Tenancy Law in British Columbia and Duhaime's Canadian Real Estate Law Centre. My favourite is the LawMag - with each new post Mr. Duhaime provides interesting and thought-provoking commentary on the latest legal developments.

Costs of Mortgages Reduced in Canada

  Effective today, the cost of mortgages for some borrowers will be reduced by the implementation of Bill C-37, An Act to Amend the Law Governing Financial Institutions. The new legislation lowers the down payment consumers must make before mortgage insurance is required by law.

Formerly, under the Bank Act, a bank in Canada could not provide a mortgage loan for more than 75% of the value of the property without having the consumer purchase mortgage insurance. Bill C-37 raises that ratio from 75% to 80%. Based on an average home price of $300,000, a home buyer with only a 20% down payment will save approximately $2500 in insurance premiums. As a result of the change, about 10% of home buyers will no longer need to purchase mortgage insurance.

Legislative Changes to BC Real Estate Related Laws

The provincial government has introduced legislation which, if passed, will amend several real estate-related laws, including the Home Owner Grant Act, the Land Tax Deferment Act and Property Transfer Tax Act. The legislation is the Budget Measures Implementation Act, 2007 (Bill 2). The following is a summary of some of the real estate related changes:

Property Transfer Tax Act - increases to $375,000 the qualifying value for purposes of the first time home buyers' exemption and applies this $375,000 value across the province.

Home Owner Grant Act - (1) allows specific owners, spouses and relatives who qualify as low-income individuals and who are subject to home owner grant reductions in a tax year (because their property exceeds the prescribed threshold value) to be eligible for low-income grant supplements for a tax year; (2) makes it an offence for applicants to supply false information to the grant administrator; and (3) allows the Home Owner Protection Office to collect repayments from applicants who were given low-income grant supplements but were not entitled.

Land Tax Deferment Act - lowers from 60 to 55 years of age, the minimum age at which a person, other than a surviving spouse or disabled person, is eligible to defer property taxes.

Bill 2 has not yet passed third reading.