Thursday, March 21, 2019

Dirty money is driving up Toronto real estate prices, report says

real-estate housing crime affordability business accountability transparency tax evasion dirty money corruption

Toronto’s real-estate market welcomes criminals, giving them an easy way to invest dirty money and driving up housing prices for regular people, according to a report published today by Transparency International Canada.

“Our laws and regulations are full of cracks that can be exploited by criminals, and they appear to be doing so in growing numbers,” the report says. “Domestic criminals have known for decades that Canada is ‘la la land’ for financial crime, but word has spread internationally too. … Canadian real estate has attracted the attention (and money of dubious origin) of corrupt government officials and organized crime syndicates from across the globe.”

In the federal budget released this week, the government announced measures to combat money laundering through property in British Columbia, but ignored the Toronto market.

Transparency International Canada studied all residential property transactions in the GTA since 2008 and discovered more than $20 billion in anonymous money entered the real estate market without any oversight or due diligence.

During this period, more than 50,000 homes were purchased by corporate entities, which can easily hide their real owners behind straw men directors — people paid a nominal fee to put their name on corporate documents. More than two-thirds of the money used to buy these residences came from untraceable sources: $9.8 billion was in cash and $10.4 billion was in the form of mortgages from unregulated lenders, which aren’t subject to anti-money laundering reporting rules.  (more...)

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