How Foreign Buyers Use Loopholes to Purchase B.C. Homes Despite the Ban

When Canada announced its long-anticipated foreign buyer ban in January 2023, headlines screamed victory. “Canada Bans Foreigners from Buying Homes,” shouted Reuters. “Ban on foreign homebuyers comes into effect,” reported CBC. The public exhaled. It looked, for a moment, like policymakers had finally admitted that foreign capital was warping real estate—and had done something about it.

But the reality? Nothing really changed. The flood of overseas wealth into B.C. real estate never stopped. It just got smarter, quieter, and more strategic.

Because the ban wasn’t a ban. It was a performance. It came with more holes than substance, with so many exemptions, loopholes, and blind spots that foreign buyers barely had to break a sweat to sidestep it. In some cases, they didn’t even need a workaround. The law itself was written to make exceptions for the very people and structures already dominating B.C.’s housing market.

So let’s rip the band-aid off and ask the real question: how are foreign nationals still buying homes in British Columbia—despite a federal ban that supposedly prevents it?

It starts with a misunderstanding of what the “ban” actually covers—and who it lets through the front door.

Understanding the Law: What the Foreign Buyer Ban Really Says

The federal Prohibition on the Purchase of Residential Property by Non-Canadians Act came into force on January 1, 2023, and was set to last for two years. On paper, it sounds simple: it bars non-Canadians from buying residential property in select urban areas across the country.

But buried in the fine print are enough exemptions to make the entire effort laughable:

• International students are allowed to buy property as long as they’ve spent 244 days physically in Canada each of the last five years and don’t exceed a $500,000 purchase.

• Temporary foreign workers can buy homes if they’ve filed taxes for three of the last four years and hold valid work permits.

• Refugees and asylum seekers are exempt.

• Spouses of Canadian citizens or permanent residents are allowed, regardless of their own status.

• Commercial investors, development corporations, and large financial entities are almost entirely untouched.

In short: if you’re wealthy and even moderately strategic, the “ban” is not a barrier. It’s an inconvenience.

Let’s look at the most commonly used loopholes.

Loophole #1: Buying Through Students, Spouses, or Nominee Buyers

This is the easiest, most widely used tactic—and it predates the ban.

A foreign national cannot legally buy a home in their own name. But what if their 19-year-old child is studying at UBC on a student visa? Or if their spouse holds a Canadian passport but never worked a day in Canada? Or if they hire a Canadian nominee—a third party who buys the property “on their behalf,” but with their money?

Welcome to proxy buying, the foreign buyer ban’s best friend. We’ve already broken this down in detail in our article on proxy ownership, but it’s worth repeating: these tactics aren’t illegal. They’re structured to appear compliant, while obscuring the true origin of funds and ownership.

Take this real-world example from 2022: a downtown Vancouver condo was purchased by a 22-year-old student from Beijing, attending SFU. She had no Canadian income. No job. No credit history. But she paid $1.3 million in cash. The money came from “family support”—a wire transfer from her father, a wealthy businessman flagged in multiple jurisdictions. Her name is on title. He holds the key.

The ban changed nothing.

Lawyers, developers, and even mortgage brokers will openly suggest these workarounds to clients. Some firms even offer “nominee services” as part of their international real estate packages.

Loophole #2: Buying Through Corporations, Partnerships, and Trusts

Perhaps the most egregious workaround is corporate ownership.

The ban explicitly applies to individual foreign nationals—not to companies registered in Canada. So if a foreign investor sets up a private B.C. corporation, installs a Canadian resident as a director or shareholder, and routes money through the business? Legal. Enforceable. Totally invisible to the public.

Real estate investment trusts (REITs), private lenders, and even shell companies are now routinely used to scoop up multi-unit residential properties, new condo projects, and even entire development sites. A 2023 audit by Transparency International Canada found that over 30% of high-value real estate in Vancouver is now held by numbered companies or private corporations with opaque ownership.

Even more concerning? Trust structures. By using a discretionary trust, a foreign buyer can appoint a Canadian trustee, provide the funds, and retain beneficial ownership without ever appearing on title. These arrangements are difficult to trace, rarely disclosed in land registry documents, and almost impossible to police.

Until the Land Owner Transparency Registry (LOTR) is properly enforced—with mandatory audits and public access—this tactic will remain the easiest way to mask foreign ownership.

Loophole #3: Pre-Sale Condos and Assignment Sales—The Wild West of Loopholes

Pre-sale condos were never designed to be regulated. They were designed to be marketed, sold, flipped, reassigned, and speculated on—often long before the first hole is even dug. And that’s exactly why they’ve become one of the easiest and most lucrative ways for foreign buyers to bypass the ban.

Let’s break this down.

When a developer launches a pre-sale project, they often sell up to 80% of the building before construction begins. These sales are mostly paper contracts—agreements to purchase a future unit upon completion. In practice, the buyer puts down a deposit (usually 15–25%), waits two to five years, and either closes the deal or assigns the contract to someone else—a process known as an assignment sale.

Here’s the trick: the foreign buyer ban does not apply to the initial purchase of pre-sale contracts, because no property technically changes hands. It’s a future promise—not a current sale. The act is silent on this nuance. Developers, lawyers, and international agents know this, and they’ve taken full advantage.

Between 2020 and 2023, a staggering 62% of all new condo sales in Metro Vancouver were pre-construction contracts, according to Urban Analytics. And while the exact percentage of foreign participation is unknown—because it’s not tracked anywhere—industry insiders widely admit that international buyers remain a major presence, especially in projects marketed overseas.

Here’s how it works:

• A foreign buyer purchases a pre-sale contract from a developer—often through a local proxy, like a relative or hired representative.

• They don’t show up in public ownership records because the building doesn’t exist yet.

• When the unit nears completion, they either flip it (and profit from appreciation) via assignment, or they take title in a Canadian spouse’s or student’s name, completely bypassing the ban.

• Or, even simpler: they hold it in trust, through a corporation, or under a nominee.

Developers are complicit. Many B.C.-based projects—particularly in Richmond, Burnaby, and Surrey—conduct marketing campaigns in Shanghai, Hong Kong, Dubai, and Seoul. Buyers abroad are offered “early access” to investment opportunities through international affiliates. Often, entire floors are sold out overseas before locals even hear about the project.

Assignment sales make it even more opaque. Once the paper contract is sold to someone else—usually for a hefty profit—the original foreign buyer disappears from the record entirely. The ban has no retroactive enforcement mechanism, no audit process, and no requirement for developers to disclose original buyers or funding sources.

Worse, assignment sales are rarely taxed properly. Despite requiring disclosure to the CRA, many flip profits are misreported, under-declared, or hidden through fake expenses. The result? A tax-avoidance and ownership-concealment loophole dressed up as standard real estate practice.

We covered the impact of low-quality pre-sales and assignments on local affordability in "Why Pre-Sale Condo Quality Is Declining Rapidly", but it’s worth repeating: this is not just about hidden ownership—it’s about broken housing logic. We’re selling homes we haven’t built to buyers who won’t live in them, through structures that dodge both regulation and taxation.

And yet, pre-sale flipping continues, virtually untouched by enforcement. Realtors still promote “VIP sales” on TikTok and WeChat. Developers still boast about sell-outs at overseas launches. Assignment contracts still fly under the radar—because no one, at any level of government, has built the infrastructure to track them.

Loophole #4: Agricultural Land, Commercial Real Estate, and Shadow Developments

Think the foreign buyer ban protects all real estate in B.C.? Think again.

The law applies only to defined residential properties in specified urban zones. That means farmland, commercial property, industrial land, and rural real estate are fair game. And guess what savvy foreign investors started targeting the moment the ban was announced?

That’s right—agricultural land and commercial-zoned parcels. In particular, properties just outside urban boundaries with the potential to be rezoned into residential, or those already located along future development corridors.

This is why we’re now seeing luxury mansions built on farmland in Richmond, South Surrey, and parts of Langley. In many cases, foreign nationals use corporate entities to buy up agricultural land under the guise of “investment” or “greenhouse operations.” What gets built, however, is not a greenhouse—but a 12,000-square-foot estate with granite gates, fountains, and garages for six Bentleys.

Local officials have called this out for years. A report from the B.C. Auditor General in 2020 highlighted how foreign investors have long exploited weak land-use enforcement to build residences under the protection of agricultural zoning. Many of these homes remain vacant, serve no farming purpose, and are often tied to offshore wealth.

Then there’s commercial property, which the foreign buyer ban barely touches. Mixed-use towers with commercial podiums? Legal. Hotels and serviced apartments? Legal. Development lots zoned for multifamily housing? Legal—until rezoned, at which point the beneficial owner is already in place.

Some foreign investors even go one step further: they buy entire development companies, thereby gaining indirect ownership of entire portfolios of residential land and pre-sale inventory. None of this appears in foreign buyer statistics because the transaction isn’t a “purchase of a home”—it’s a corporate acquisition.

The result? Foreign ownership, hidden inside legal development structures, continues to expand, unchecked and invisible.

Loophole #5: Using Canadian Permanent Residency as a Buying Tool—Without Living Here

Permanent residency in Canada was designed to attract skilled workers, reunite families, and support long-term contributors to our society. But in the world of real estate, permanent residency (PR) has quietly become a backdoor for foreign buyers—especially those with no intention of ever living in B.C.

Let’s be blunt: for the world’s wealthy, Canadian PR is a status symbol, a safety net, and a way to legally bypass the foreign buyer ban while continuing to operate abroad. And it’s shockingly easy to get.

We’re not talking about doctors immigrating for work or families fleeing war. We’re talking about high-net-worth individuals (HNWIs) who obtain PR through investment pathways, immigration consultants, or family sponsorships, then leave Canada almost entirely untouched—except for the real estate they buy and the tax shelters they set up.

Here's how it works:

1. A wealthy foreign buyer applies for PR through an economic immigration stream.

2. Once approved, they obtain status—but they’re not required to be physically present year-round.

3. They buy homes in Vancouver, Richmond, or West Vancouver under their own name—or in their children’s names, who are often Canadian PRs or citizens by birth.

4. They spend a few weeks per year in Canada, mostly during holidays or school breaks, and maintain “official residency” through a rented mailbox, utility bills, and part-time enrollment in schools or business listings.

5. Because they hold PR, they are not considered “foreign buyers” under the ban.

And it’s all legal.

In fact, under Canadian immigration rules, PR holders need only spend 730 days in Canada over a five-year period to maintain their status. That’s just two years total, not consecutive. This means someone can live abroad for 60% of their time, run international businesses, and still qualify as a Canadian resident—while buying homes, avoiding foreign buyer taxes, and paying little to no income tax in Canada.

The kicker? Many of these individuals are using Canadian real estate not to live—but to store wealth. They may buy multiple homes “for the kids,” acquire farmland that’s never used, or hold downtown penthouses that remain empty 10 months of the year.

We explored this phenomenon in "Satellite Families and the Ghost Housing Market", where entire neighborhoods are filled with million-dollar homes technically “owned” by Canadian residents—but functionally detached from the community. These homes distort property values, reduce rental supply, and contribute to the eerie lifelessness of many West Side streets.

According to BC Assessment, homes owned by PRs who report no taxable Canadian income make up a significant portion of high-end property ownership. In 2023, a leaked CRA report found over 25% of luxury homes in Vancouver valued over $4 million were owned by individuals who declared under $50,000/year in income.

And while these owners may technically be residents, their economic participation in Canada is minimal. Many bank abroad, file taxes abroad, and earn money abroad, while reaping the benefits of Canadian housing as a safe, appreciating asset.

In other words: they’re foreign in every meaningful sense—except legally.

So while the ban claims to stop “foreign buyers,” anyone who understands immigration rules knows how to secure PR with minimal commitment and maximum access. As a result, the line between “foreign” and “resident” has become a legal fiction, used to create the appearance of compliance while keeping the money—and the homes—flowing.

Loophole #6: Buying Through Children—Especially Those Born in Canada

Another favorite tactic among wealthy international buyers? Use the kids.

It’s shockingly common for homes in Vancouver, Burnaby, or Richmond to be legally owned by individuals under the age of 25—with no job, no income, no credit history, and no apparent means of financing a property. Yet they hold title to condos, townhomes, and multimillion-dollar estates.

Why? Because they were born in Canada, or granted permanent residency or student visas. That’s all it takes.

This is particularly common among families from mainland China, Iran, and the Gulf States—many of whom send their children to Canada for education while buying property “in their name.” This serves multiple purposes:

• It secures foreign capital in a Western market.

• It avoids the foreign buyer ban, since the child is Canadian.

• It sets the child up with an asset base for future business or immigration.

• It keeps the family’s offshore wealth safe from political or financial volatility back home.

In one widely reported case, a 23-year-old UBC student was found to own $57 million in real estate across Metro Vancouver, including luxury homes in Point Grey and Shaughnessy. All were purchased with offshore funds. When questioned, her only comment was, “My parents help me.” Her name was on the deeds. The money came from elsewhere.

Legally, there’s little recourse. Canada does not restrict citizens or permanent residents—even if they are minors, students, or unemployed. And because the ban doesn’t look at source of funds, there’s no requirement to prove where the down payment came from.

The result? Young “owners” become human shields for foreign capital. They sign documents. They pay utilities. But they don’t earn the money—and they don’t live in the homes year-round.

And no one in government is tracking it.

Loophole #7: Developer Exemptions and How the Industry Helps Foreign Buyers Bypass the Law

The foreign buyer ban was marketed as a hammer. But in the hands of B.C.’s development industry, it became a feather. Why? Because the very people who profit most from selling homes—developers, agents, and marketers—are also the ones with the most incentive to preserve foreign demand.

So when the ban came into effect, did developers scale back their international sales teams? Did they stop marketing to foreign buyers? Did they restructure their projects to serve local residents?

Of course not. They pivoted. Quickly.

And the reason they could pivot so effectively is because the ban explicitly exempts large-scale development projects. According to the Canada Mortgage and Housing Corporation, properties intended for development of more than three units are exempt from the prohibition. So if a developer owns land and intends to build a condo tower or multifamily rental building, they’re allowed to sell pre-sale contracts—even to foreign buyers, so long as the transfer happens before the project is completed and titled.

This is the built-in workaround for almost every major developer in the Lower Mainland. They continue to market towers in overseas markets like Hong Kong, Singapore, and Dubai. The units are often purchased in bulk by foreign buyers (or proxies) and flipped before occupancy. In this model, developers never break the law, but the spirit of the law is completely undermined.

Consider this: a Hong Kong investor buys ten pre-sale units in a new Burnaby development. He puts down 20% on each. He uses proxies or relatives to hold the contracts. The building is exempt from the ban because it's classified as “under development.” By the time the building is complete, the units have already been reassigned or titled under Canadian-resident names. Legal? Yes. Transparent? Not even close.

Even worse, many developers actively partner with foreign marketing agencies to launch international sales campaigns. If you’ve ever searched Chinese-language WeChat channels for B.C. real estate, you’ll see full-page ads promoting “pre-construction investment opportunities” in Richmond, Coquitlam, and Surrey. Units are sold sight unseen, paid for in cash, and assigned before occupancy.

Developers don’t just allow this—they encourage it. Why? Because foreign capital is fast, flexible, and relatively risk-free. Foreign buyers rarely request mortgage financing, don’t haggle over pricing, and often buy multiple units at once. They help developers meet pre-sale quotas, which are required to secure construction financing. No pre-sales? No tower.

So when the government announced the foreign buyer ban, developers went into overdrive finding legal but morally bankrupt ways to keep the money flowing. One developer in the Fraser Valley was caught coordinating foreign proxy buyers through a network of immigration consultants, ensuring that buyers “appeared local” while using offshore funds. Another in Vancouver launched a “student-only” sales campaign aimed at international buyers who had PR status through their children.

All of this is enabled by a lack of enforcement and a lack of data. Developers are not required to report who their pre-sale buyers are, where the money comes from, or whether the purchasers are acting on behalf of someone else. And because the Land Title Office only records ownership at the time of closing—not who originally signed the pre-sale contract—foreign buyers vanish from the record before the unit even exists.

Let’s also not forget the role of real estate agents in this process. Many agents are complicit in facilitating these sales, whether through outright deception or willful ignorance. Some advertise directly to overseas investors. Others help structure transactions to appear compliant—connecting buyers with immigration consultants, corporate lawyers, or proxy representatives who specialize in “foreign-exempt acquisition strategies.”

In 2023, a whistleblower report surfaced detailing how one brokerage in Richmond offered “title structuring packages” to foreign buyers, which included nominee services, tax deferral strategies, and referral links to developers offering exempt units.

Did anyone go to jail? Nope.

Was any license revoked? Also no.

In fact, despite multiple investigations, not a single major B.C. developer has been penalized for knowingly facilitating foreign purchases under the guise of pre-sale exemptions.

And the result is what you see today: condos launched at $1,300 per square foot, marketed as “investment-grade” assets, bought up by faceless entities through pre-sale contracts, and flipped before they ever become homes.

So while first-time Canadian buyers line up for lotteries and mortgage pre-approvals, developers are still taking bulk deposits from foreign buyers who were supposedly banned. All done through legal technicalities, industry complicity, and a regulatory framework that’s too busy tracking unit counts to care who’s holding the pen.

Loophole #8: Wealth Transfer Through Real Estate—The Inheritance Game No One Talks About

Canada’s tax system is built on the assumption that wealth transfer is something that happens later in life—after retirement, after death, or at least after someone has paid taxes on the money. But in B.C.'s real estate market, that assumption is laughably outdated.

Because here’s what’s actually happening: foreign families are using real estate as a vehicle to move enormous wealth into Canada, tax-free, invisible, and completely legal—all by transferring it through their Canadian children, spouses, or proxies long before the CRA ever gets a whiff of it.

Welcome to the global inheritance strategy of the ultra-rich. It’s the unregulated, luxury-backed Trojan horse that’s been hiding in plain sight.

Let’s walk through how it works.

A high-net-worth individual (HNWI) in Beijing, Dubai, Tehran, or Moscow wants to protect their wealth from local political instability, regulatory changes, or currency devaluation. Canada offers a perfect opportunity: stable, English-speaking, no wealth tax, and world-class legal protections for private property. And if their child, spouse, or cousin has Canadian status—citizenship, PR, or even a study permit—it’s open season.

They send $2 million to a Canadian bank account—either directly, or funneled through offshore holding companies, trusts, or real estate lawyers who handle “family wealth planning.” That money is then used to purchase a Vancouver home or condo. Title goes in the child’s name. The CRA has no requirement to ask where the money came from. No one verifies the source unless it raises a red flag under FINTRAC (which rarely happens).

Just like that: the property is now legally Canadian-owned, even though the money was never earned in Canada, and no taxes were paid on it anywhere. And because Canada doesn’t have an inheritance tax, gift tax, or global wealth tax, there’s nothing illegal about this arrangement.

It’s just not taxed. At all.

This is a problem—not because people shouldn't be allowed to help their kids, but because this specific practice is pricing out everyone who doesn’t have access to untaxed international wealth.

A young Canadian couple saving diligently for their first home can’t compete with a 21-year-old SFU student whose parents just wired $1.5 million from a Hong Kong account. That same student, by the way, might not even live full-time in the unit—they might rent it out, leave it vacant, or just sit on it while it appreciates.

And yes, this is happening at scale.

A 2019 CMHC report found that over 42% of first-time homebuyers under 30 received “significant financial assistance from family”. That’s not a small head start—that’s a system.

But those numbers only include buyers who disclosed the assistance. In cases involving foreign-funded purchases, the source of money is often disguised through debt forgiveness, non-repayable loans, or corporate transactions. That means the true scale is likely much higher.

And there’s virtually no oversight.

• Banks don’t require proof of income if a purchase is made in cash.

• CRA doesn’t audit gift money unless it’s suspicious or massive (and even then, only rarely).

• Developers don’t care who pays the deposit, only that it’s paid.

• Realtors are not required to verify beneficial ownership, unless it’s part of an anti-money laundering flag.

So we’ve created a system where foreign wealth enters the Canadian housing market under the legal cover of family planning. And once that money is in, it’s incredibly hard to track, tax, or reclaim. That home can later be sold for capital gains (with only 50% of the gain taxed), refinanced for rental income, or handed down again with no estate tax.

It’s wealth laundering through legitimate channels—and it’s devastating the dream of homeownership for actual Canadian workers.

We already explored how this tactic ties into student ownership in "If Foreign Students Left Tomorrow, Would Housing Prices Drop?", but it bears repeating: the system isn’t just failing. It’s being used exactly as designed—by people who understand it better than we do.

Think of it this way: the average Canadian earning $85,000/year is capped out at a $450,000 mortgage with a 20% down payment. A foreign-funded family, meanwhile, can buy a $2 million home in cash, avoid the foreign buyer ban, avoid foreign buyer tax (through their kid), and legally pay zero Canadian income tax on the money used.

What should have been a closed loophole has become a generational wealth pipeline. And it’s quietly reshaping entire neighborhoods.

Look at West Vancouver. Look at Kerrisdale. Look at the quiet mansions along Marine Drive or Oak Street, where 10-bedroom homes sit dark for months while local families squeeze into 2-bedroom rentals.

These aren’t random anomalies. They’re the logical outcome of policy failures, global tax avoidance, and the Canadian obsession with homeownership as investment.

And as long as this strategy remains legal, expect more of the same: wealth pouring in, disguised as “help for the kids,” inflating demand, and pricing out locals one million-dollar gift at a time.

Loophole #9: Flipping, Assignments, and How CRA Enforcement Barely Exists

It’s one thing for foreign buyers to use legal structures and family connections to buy property in Canada. But what happens after they’ve bought it—when they flip it? Or assign it? Or resell it without ever setting foot in it?

That’s where the system goes from flawed to utterly dysfunctional.

Because once again, Canada’s housing market isn’t just a place to live—it’s a financial instrument. And in B.C., one of the most powerful—and abused—financial instruments is the assignment sale.

Let’s break it down.

An assignment sale happens when a buyer of a pre-sale unit (usually a condo) sells their purchase contract to another buyer before the unit is complete. This is legal and increasingly common in B.C.—especially in high-growth areas like Burnaby, Coquitlam, Surrey, and Downtown Vancouver. The original buyer (often foreign-funded) assigns the contract for a profit, sometimes before a shovel even hits the ground.

In theory, these sales should be taxed and tracked. In practice, they often aren’t.

The Canada Revenue Agency (CRA) requires assignment flippers to declare their profits as income. But in reality?

• Many declare only a portion of the profit.

• Some declare it as capital gains (which are taxed at 50%) instead of business income (which is taxed at full marginal rates).

• Others don’t declare it at all—especially when the funds originated overseas and there’s no Canadian income trail.

This creates a massive loophole in tax enforcement, which directly rewards foreign-funded flippers who operate outside of the CRA’s jurisdiction. According to a 2019 auditor general’s report, CRA was found to have collected taxes from fewer than 10% of suspected real estate flippers in audited cases in British Columbia.

Think about that: flipping is legal, under-reported, and barely enforced. Which makes it the perfect exit strategy for a foreign buyer who doesn’t want to hold a unit long-term. They don’t pay the foreign buyer tax. They don’t declare the income. And if they route the transaction through a Canadian proxy? They disappear from the record entirely.

This isn’t theoretical. In 2021 alone, it’s estimated that thousands of assignment sales occurred in the Metro Vancouver region, many with profits in the $100,000–$400,000 range per unit. And because there’s no centralized public registry for assignment sales, the government doesn’t even know the full extent of it.

Let’s also not forget about shadow flipping—a process where contracts are assigned multiple times before closing, each time at a higher price. This was infamously exposed in a 2016 Globe and Mail investigation that revealed how Vancouver agents were facilitating double and triple assignments behind the scenes, with developers often turning a blind eye.

Despite widespread outrage and political promises to regulate it, the practice didn’t stop—it simply became more discreet.

One of the key enablers of all this is the lack of real-time data sharing between developers, realtors, and the CRA. When an assignment sale happens:

• Developers are not required to report the buyer’s true source of funds.

• Realtors are not obligated to verify beneficial ownership.

• Lawyers and notaries often process the paperwork without raising red flags—especially when working with corporate buyers or family trusts.

Even when FINTRAC reports are filed (as required for large cash transactions), they are rarely investigated in time to stop the sale. In most cases, enforcement comes months or years later, and by that point, the buyer has already flipped the unit and left the country.

So we’re left with a system where:

• Pre-sale contracts are bought by foreign proxies.

• Those contracts are flipped for six-figure profits through assignments.

• The CRA doesn’t catch the flippers.

• The province doesn’t track the assignments.

• The developers profit anyway.

• And the homes never make it to market for people who actually want to live in them.

And who pays the price?

Local buyers, who are told to “get pre-approved” and join housing lotteries. Young families, who line up for hours to bid on units that were flipped three times before they could even tour the showroom. Renters, who watch vacancy rates drop while empty units collect dust.

It’s not just broken—it’s rigged.

Even when the CRA does investigate, its tools are limited. As of 2023, there’s still no mandatory income verification for real estate purchases. There’s no open registry of assignment sales. And while new reporting rules for flipping (including taxing all properties sold within 12 months as business income) were announced federally, they rely entirely on self-reporting.

Unless a buyer voluntarily declares their flip, or gets caught in a random audit, nothing happens.

So assignment flipping remains the default strategy for laundering capital gains, skirting the foreign buyer ban, and ensuring that real estate functions as a casino—not shelter.

And every time a local buyer loses a bidding war to a paper assignment, they’re not just losing a home. They’re losing to a system that was never designed to protect them in the first place.

Loophole #10: The Enforcement Mirage—Why the Foreign Buyer Ban Was Built to Fail

By now, it should be painfully clear that the federal foreign buyer ban isn’t stopping foreign buyers. But what’s worse than a law that fails?

A law that was never meant to succeed.

Because make no mistake: the Prohibition on the Purchase of Residential Property by Non-Canadians Act was not created to be enforced—it was created to be announced. It was a political artifact, designed for headlines, optics, and polling numbers in the middle of a worsening affordability crisis.

And when you examine the ban’s structure, scope, and oversight mechanisms, that intent becomes crystal clear.

Let’s start with enforcement. Who exactly is responsible for making sure foreign buyers aren’t buying homes? The answer is... no one, really.

Under the law, enforcement responsibility falls under Canada Mortgage and Housing Corporation (CMHC) and Innovation, Science and Economic Development Canada (ISED)—neither of which has any experience in real estate investigations, financial surveillance, or border enforcement.

There is no dedicated agency tasked with:

• Investigating suspicious transactions

• Auditing land title records

• Verifying source of funds

• Cross-referencing citizenship and tax records

• Or prosecuting violations

Instead, the law depends almost entirely on voluntary compliance. Buyers are expected to declare their status truthfully. Developers are expected to conduct due diligence. Lawyers and notaries are supposed to flag suspicious deals.

But what happens if they don’t?

The penalties are laughable: a maximum fine of $10,000 for violations. That’s right—$10,000 for breaking a law designed to protect multi-million-dollar housing markets.

A foreign investor who violates the ban can be fined a sum smaller than a single mortgage payment on a West Side home. The property itself cannot be seized unless both the buyer and seller are proven to have “knowingly contravened” the act—an almost impossible bar to clear without whistleblowers or audits.

In 2023, CBC reported that fewer than five charges were laid under the ban in its first year. Five. In a province where thousands of homes are purchased annually using opaque money, proxies, and nominee structures.

Meanwhile, land title offices do not ask for citizenship or immigration documentation. Realtors don’t submit ownership vetting to any centralized database. And developers are still free to sell to numbered corporations, trusts, and pre-sale assignment buyers—none of whom have to prove anything until final registration, if ever.

So how does this ban even work?

It doesn’t. And that’s the point.

Let’s compare this to other enforcement-heavy laws. Canada’s tax system uses AI-assisted surveillance, mandatory employer reporting, audit trails, and heavy penalties to catch under-reporting. Even speeding tickets are issued with photographic proof. But buying a $2.4 million home through a cousin’s name while residing in Shanghai? No red flags. No knock at the door.

The reason? Political cost.

Real estate is B.C.’s golden goose. It generates $4–6 billion in annual provincial tax revenue, feeds tens of thousands of jobs, supports municipal budgets through development fees, and underwrites countless infrastructure projects.

Crack down too hard, and the whole house of cards trembles.

This is why, even after the Cullen Commission laid out dozens of recommendations to crack down on foreign money and opacity, few of them were adopted. The Cullen Commission Report, released in 2022, called for:

• Mandatory beneficial ownership transparency

• Aggressive CRA investigations into real estate capital flows

• Public audits of land registries

• Stronger FINTRAC oversight

• A single agency to investigate laundering through housing

Yet most of those recommendations were delayed, defanged, or ignored. Why? Because enforcement would mean confronting the real elephant in the room: that Canada’s housing boom was built, in part, on opaque global money.

And nobody in government wants to admit that—not when developers are funding campaigns, not when municipal budgets rely on development fees, and not when homeowners vote based on property values.

So what we get instead are symbolic bans, PR stunts, and toothless laws.

And what do foreign buyers get?

• Student loopholes

• PR shields

• Trust workarounds

• Assignment flips

• Proxy ownership

• Pre-sale exemptions

• Agricultural purchases

• “Gifted” wealth

• And zero real oversight

All wrapped in the comforting lie that something is being done.

In the meantime, affordability worsens. Locals lose faith. And every new “ban” is greeted by lawyers, consultants, and foreign real estate agents with a simple question: “How do we get around it?”

They don’t even ask if—it’s always how.

And unless enforcement becomes centralized, aggressive, transparent, and resourced, that question will always have an answer.

The Real Impact: How These Loopholes Have Shaped B.C.’s Housing Crisis

When defenders of foreign investment are backed into a corner, they often respond with the same tired argument: “Sure, some foreign buyers got in—but they didn’t cause the crisis. Vancouver has a supply problem. It’s about zoning. Immigration. Millennials wanting lattes and backyards.”

But that’s only part of the picture.

Because while foreign buyers may not be the sole reason B.C.’s housing market went off the rails, the way their money has moved—through loopholes, proxies, trusts, and speculation—has fundamentally reshaped how housing works in this province.

Let’s break it down:

1. They Redefined Home Prices Across Entire Neighborhoods

When a buyer is competing in the open market, they operate with financial limits. They rely on mortgages, credit scores, down payments, and employment verification. Their offers are capped by what a bank will approve and what their income allows.

Foreign capital doesn’t play by those rules.

It doesn’t need a mortgage. It doesn’t need an inspection. It doesn’t care about cash flow or investment timelines. And when that kind of money enters a housing market with limited supply and few regulations, it can—and did—drive up prices for everyone.

We’re not talking about one or two wealthy families outbidding locals. We’re talking about entire corridors of Greater Vancouver being repriced upwards by buyers who never intended to live here. From 2010 to 2018, West Vancouver, Richmond, Burnaby, and the Cambie Corridor saw home prices double or triple, fueled in large part by speculative international demand.

During that time, homes routinely sold for $200,000–$600,000 over asking, in all-cash deals with no conditions. Local buyers were steamrolled. This wasn’t supply-demand economics—it was financial displacement.

The data supports it: a 2016 report by Statistics Canada revealed that non-resident owners paid significantly more for equivalent homes than Canadian residents—by as much as 30–40% in some areas. Why? Because they weren’t buying homes. They were buying assets.

2. They Created the Ghost Neighborhood Phenomenon

Drive through some of Vancouver’s most expensive neighborhoods after dark, and you’ll notice something eerie: the lights are off.

In Point Grey, Shaughnessy, and Kerrisdale, you’ll find block after block of multimillion-dollar homes sitting empty. The lawns are mowed. The hedges are trimmed. But the windows stay dark.

These aren’t abandoned homes. They’re owned—but not lived in. They are parked wealth, used for future inheritance, corporate sheltering, or political escape routes. This phenomenon has been widely documented in local media and confirmed by data from Vancouver’s Empty Homes Tax.

In 2023, the City of Vancouver reported that over 10,800 homes were vacant, even after a 3% vacancy tax. In high-end neighborhoods, the rate of vacancy was significantly higher.

This matters because empty homes are functionally removed from the supply equation. They don’t house workers. They don’t enter the rental market. They don’t generate community vibrancy. They are shells of capital—and they hollow out the city from the inside.

We explored this in detail in "Satellite Families and the Ghost Housing Market", where buyers use family members to hold real estate while continuing to live abroad, reducing integration and housing utility across entire districts.

3. They Turned Homes Into Financial Instruments

Speculation isn’t new. But in B.C., thanks to foreign capital, real estate became less about shelter and more about leverage.

Buyers used homes to:

• Secure offshore credit lines

• Collateralize international business deals

• Store wealth away from unstable home countries

• Flip for tax-free capital gains (often using proxies)

• Move money out of jurisdictions with capital controls

This fundamentally changed the role of real estate in B.C.

What used to be a personal milestone—buying a home to raise a family—became an investment thesis. Pre-sale condos were sold like stocks. Assignment contracts were flipped like NFTs. And prices were no longer anchored to local incomes—they were anchored to global capital flows.

That’s why the average detached home in Vancouver sells for over $2 million, while the average household income hovers around $85,000. That 24x price-to-income ratio isn’t just bad policy. It’s a symptom of a market hijacked by international money.

4. They Derailed Local Policy

When money talks, policy listens. And the influx of foreign capital didn’t just reshape prices—it reshaped politics.

Municipalities became dependent on development fees, land transfer taxes, and property tax windfalls driven by high-value transactions. Developers, many with foreign capital backing, became central to city-building strategies.

This led to:

• Rezoning favors for luxury projects

• Tower approvals in low-density zones

• Delays in affordable housing projects

• A policy obsession with “density” rather than “accessibility”

• Reluctance to introduce stronger anti-speculation tools

Local politicians and planners feared that regulating foreign ownership too aggressively would hurt the economy. So they introduced weak taxes (like the 20% foreign buyer tax), delayed reforms (like beneficial ownership registries), and looked the other way while pre-sale speculation exploded.

5. They Shattered Public Trust

Perhaps the most lasting damage of all: the sense that housing is no longer for people who live here.

Ask any millennial or Gen Z renter in Vancouver how they feel about their chances of buying a home. Most will laugh. Some will cry. Others will point to the Chinese-language billboards for pre-sales in Oakridge, or the vacant homes near their apartment, or the classmate whose parents bought them a $3 million duplex “for school.”

They’ll tell you what you already know: the system isn’t broken. It’s working exactly as intended—for people with money, not people with jobs.

And when locals lose faith in the fairness of the housing system, everything suffers. People delay starting families. They leave cities. They stop investing in their communities. They stop voting.

Because why should they believe a government that claims to protect affordability while writing a foreign buyer ban that doesn’t ban anyone?

What Needs to Change—Real Solutions, Real Accountability, and Real Transparency

We’ve torn through the loopholes. We’ve exposed the shell games. We’ve followed the money, the proxies, the trusts, the assignments, and the spineless enforcement regimes. And now, we’re left with the obvious question:

What do we do about it?

Because here’s the brutal truth: unless we overhaul how real estate is regulated, owned, tracked, and taxed in British Columbia, we’ll stay stuck in this self-inflicted crisis—watching housing prices defy gravity while middle-class Canadians are priced out of their own cities.

The good news? We already know what needs to be done. We’ve known for years. The bad news? No one in power has had the courage to do it.

Let’s lay it out anyway.

1. Ban All Proxy Ownership for Residential Property

If you’re not the beneficial owner, you shouldn’t be on title. Period.

We need to make it illegal to purchase residential property using nominee buyers, shell companies, or third parties acting on behalf of someone else without full disclosure and taxation. That means:

• No more students buying $4M homes “with help from family.”

• No more foreign nationals routing funds through their PR children.

• No more trusts shielding beneficial ownership from land registries.

This isn’t radical. Countries like the United Kingdom and Germany already have laws requiring transparent declarations of beneficial ownership for property purchases. We should too.

And yes, this would reduce demand at the high end of the market. That’s the point.

2. Create a Public, Searchable Registry of Real Owners

The Land Owner Transparency Registry (LOTR) was a good start. But it’s toothless without enforcement, mandatory audits, and true public access.

We need a fully open, searchable registry that lists:

• The actual beneficial owner of every residential property

• The full chain of ownership (corporations, trusts, family links)

• Purchase price and transaction history

• Financing sources where available

Other countries have done this. Denmark, Norway, and even Ukraine all offer more transparency than British Columbia when it comes to land ownership.

Why are we so behind?

3. Regulate and Tax Pre-Sale Assignments Like Financial Securities

If a real estate contract is being flipped for a six-figure profit before the building even exists, it’s no longer a home—it’s a security.

Assignment sales should be regulated through securities law, taxed at full business rates (not capital gains), and reported publicly. Developers must be forced to disclose:

• The original buyer of each unit

• All subsequent assignments

• The price of each transaction

And the CRA should receive automatic reporting of all assignments above a fixed threshold.

4. Enforce the Ban—With Real Teeth

Right now, violating the foreign buyer ban carries a $10,000 fine. That’s a joke.

We need:

• Automatic title audits of purchases involving students, unemployed buyers, or foreign-funded deals

• A dedicated enforcement unit with access to immigration, tax, and banking data

• Penalties that include asset forfeiture, not just fines

• A reversal clause for illegal purchases, where the property is seized or resold

The law must also include private right of action—allowing whistleblowers, journalists, or housing advocates to bring civil complaints forward.

5. Tax Foreign-Funded Residential Purchases at the Source

If we won’t ban foreign buyers outright, we should at least disincentivize foreign capital from distorting our market. That means:

• A permanent 30–50% tax on homes purchased with foreign-originated funds

• No exemptions for proxies, trusts, or PR children

• Higher property taxes on homes left vacant for more than 6 months per year

• A national database of capital flows into residential real estate

Let’s stop pretending these are “gifted funds” from loving parents. They’re unregulated international transactions reshaping our economy.

6. End Tax-Free Flipping Once and for All

The CRA’s new flipping rules are a step forward, but they’re still based on self-reporting.

We need:

• A mandatory holding period of 2–3 years on all residential purchases before resale

• Mandatory business income tax on any home sold within that window

• No capital gains exemptions on secondary residences

• Full CRA auditing of repeat flippers, pre-sale assigners, and low-income high-value owners

Every time someone flips a home for profit and pays no tax, another Canadian loses their chance at ownership.

7. Apply Pressure Internationally

Canada doesn’t operate in a vacuum. We need treaties, information-sharing, and joint investigations with countries like China, Iran, Russia, and the UAE to trace money entering our markets through legal and illegal means.

If a foreign national is laundering money through Vancouver real estate, it’s not just a local housing issue—it’s a global crime problem. Work with Interpol. Work with the Financial Action Task Force. Stop acting like a neutral haven.

8. Change the Culture—Homes Are Not Safety Deposit Boxes

Finally, we need a cultural reset.

For years, Canadians have treated rising home prices as a sign of economic health. Politicians run on promises to “protect equity” and “preserve property values.” But if those values are propped up by foreign capital, speculation, and opaque ownership, what are we really preserving?

A house is not a hedge. A condo is not a coin. Real estate is not a stock ticker. It’s where people live. Until we start treating it that way again, no amount of half-baked bans or public relations exercises will save us.

Final Words

The foreign buyer ban was supposed to be a turning point. Instead, it became a smokescreen. And behind that smoke, foreign money still flows, homes still sit empty, and locals still get pushed out.

It’s not because we can’t stop it. It’s because the people who benefit don’t want it stopped. Until we admit that, the loopholes will remain—and the dream of housing in B.C. will remain just that: a dream.

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