Trying to afford a house in BC seems like an impossible task, and now we are beginning to understand why. According to the BC government, over $7 billion worth of dirty money has been laundered through the province. Because of this, housing costs have increased substantially making real estate in BC next to impossible to afford.
Earlier today, the BC government released information regarding money laundering. According to their statement, over $7 billion has been laundered through BC in 2018 alone. Of this, it is believed $5 billion was laundered through the real estate market alone. This has caused the cost of buying a home to increase by about 5%.
Carole James, Minster of Finance, has stated that the amount of money being laundered is higher than anyone could have predicted.
British Columbia’s Expert Panel on Money Laundering in Real Estate released a report today touching on the details of this very serious topic. The report states that thousands of specific properties worth billions were labelled as “high risk” for potential money laundering, tax evasion, or both. The report also found that there was no agency or police force with enough oversight or resources to investigate suspicious activities.
In January of this year, the City of Vancouver council voted to crack down on money laundering. The motion unanimously passed on January 29, 2019, calls for the city to work alongside the province and law enforcement agencies to “prevent money laundering that could be directly or indirectly linked to businesses operating with or without a business license in the City of Vancouver.”
This motion allows the City to require “voluntary stringent financial reporting.” This can include requiring audited financial statements from businesses, or individuals when paying business licenses, taxes or any other type of fee that is charged by the City.
The motion also states that these audits can be required from businesses or properties in areas where there is a higher chance of attracting money laundering and/or organized crime.
The City of Vancouver also called upon the provincial government to launch a public inquiry into money laundering in the city. In the February 13, 2019 motion, Councillor Christine Boyle called for a public inquiry to investigate the links between money laundering, fentanyl distribution, and the Vancouver real estate crisis.
According to Boyle, the average price of a single-family detached home in Greater Vancouver increased as much in 2016 as it did from 1981 to 2005.