Is Property Transfer Tax Reform On The Horizon?

The Property Transfer Tax Act (British Columbia) could soon be amended to impose property transfer tax ("PTT") on beneficial transfers of real estate.  The NDP-Green Party Coalition Government budget, scheduled for release this month, is expected to focus on the real estate market and PTT reform may be on the agenda. 

Under the current regime, PTT is only payable when a new owner of an interest in real property is registered on title with the Land Title Office.  While the registered owner and the true beneficial owner may be one and the same for your average homeowner, commercial property owners often separate legal and beneficial ownership by registering a corporation to hold title to property as a bare trustee for and on behalf of the true beneficial owner.  The beneficial owner will typically own all shares in the bare trustee.  When it comes time to transfer the property, the beneficial owner will sell the shares in the bare trustee to the purchaser and enter