The Crackdown Has Begun: How Canada Is Finally Getting Serious About Money Laundering in Real Estate (2025)

A Billion-Dollar Problem Hiding in Plain Sight

For over a decade, Canadian real estate—particularly in British Columbia—has been a global magnet for dirty money. Shadowy shell companies, anonymous buyers, proxy owners, and elaborate laundering chains have distorted housing markets, inflated prices, and enabled criminals to stash their wealth with impunity.

But 2025 is different.

This year marks the federal government’s most aggressive push to finally confront the money laundering crisis that’s been festering for far too long. What began as political theatre has evolved into sweeping enforcement, with criminal investigations, seizures, forced sales, and massive fines.

The industry is shaking. Lawyers are warning clients to restructure ownership. Brokers are scrubbing their pre-sale lists. Developers are quietly ghosting longtime “VIP” clients.

This is not a drill.

The crackdown is real—and the fallout is only just beginning.

What Triggered the 2025 Crackdown?

The Cullen Commission Was Just the Beginning

Back in 2022, the Cullen Commission’s final report laid bare what most already knew: money laundering in Canadian real estate wasn’t an accident—it was institutionalized negligence. Regulators ignored red flags. Realtors filed almost no suspicious activity reports. Banks looked the other way. Developers welcomed foreign cash.

But while the Cullen Commission exposed the problem, little changed. Until now.

Political Will Meets Economic Desperation

Why the sudden change in tone? The short answer: political survival. With the housing crisis spiraling into full-blown social unrest, federal and provincial governments are being forced to show action—or lose support entirely.

• Homeownership is at its lowest rate in decades.

• Renters are squeezed out by investors holding units empty.

• First-time buyers are competing against shell companies.

A 2024 internal report from FINTRAC (leaked to the press) revealed that 18 small and medium-sized banks had gaps in their anti-money laundering programs. The report also indicated an "emerging pattern" of criminals using fake mortgages to launder Chinese money through Canadian real estate. Additionally, the agency found potential links between illegal wildlife trade and organized crime, based on reports received in 2023. 

The political pressure became impossible to ignore. So the government acted. Hard.

What the New Enforcement Looks Like

1. Public Beneficial Ownership Registry Is Live

As of March 2025, all provinces must comply with a public, searchable beneficial ownership registry. This registry, long resisted by developers and certain industry lobbyists, is designed to expose who actually owns a property—not just the corporate front.

• All trusts, corporations, and nominees must disclose ultimate ownership.

• Failure to comply can result in property seizure or forced sale.

• False declarations are now criminal offences.

British Columbia’s Land Owner Transparency Registry (LOTR), which piloted this system in 2021, is now being modeled nationwide—but with more teeth.

2. RCMP’s IMLITs Launched

RCMP’s Integrated Money Laundering Investigative Teams (IMLITs) have launched operations across provinces such as British Columbia, Ontario, Alberta, and Quebec. These multi-agency teams target organized financial crime, including property-based laundering.

Key focus areas:

• Offshore capital used to buy property via proxies.

• Fraudulent mortgage applications.

• Use of cash or crypto for luxury property purchases.

• Developers tied to politically exposed persons (PEPs).

Properties have already been frozen or seized, including high-end condos in Vancouver, luxury homes in Toronto, and farmland parcels held by offshore shell firms.

3. Revamped FINTRAC Penalties and Compliance

FINTRAC—the financial watchdog once seen as toothless—has been granted expanded powers:

• Surprise audits of brokerages, lawyers, and developers.

• Maximum fines raised to $5 million per violation.

• Real estate professionals must file suspicious transaction reports or risk license suspension.

In 2024 alone, FINTRAC imposed over $72 million in fines—more than the last 15 years combined.

Who’s Getting Caught

The VIP Blacklist: High-Net-Worth Foreign Nationals Under Scrutiny

The new crackdown has revealed a pattern: many luxury homes in Metro Vancouver, Toronto, and Montreal were purchased by proxies on behalf of politically exposed persons (PEPs) from China, Russia, Iran, and Nigeria.

One Vancouver-based developer had to cancel five pre-sale contracts in a single tower when federal agents flagged the buyers’ capital sources as “high risk.”

“These weren’t gangsters. These were ‘businessmen’ who moved money through five jurisdictions, signed with a cousin’s passport, and then bought four units in cash,” a former CRA investigator told us.

Now, even developers are scrubbing their lists and flagging problematic buyers before the feds do it for them.

Realtors, Lawyers, and Developers Feel the Heat

Brokerages Are Finally on the Hook

Before 2023, many real estate brokerages filed zero suspicious transaction reports. Some even bragged about never asking clients where their money came from.

That era is over.

Now, brokerages that fail to comply face:

• License suspensions

• Audits and name-and-shame press releases

• Criminal referral to the RCMP

One major Vancouver brokerage was fined in February for failing to verify the identity of multiple cash buyers linked to a Middle Eastern investment fund.

Lawyers No Longer Immune

Historically, real estate lawyers operated with near-complete discretion, citing solicitor-client privilege. But in 2025, that firewall is collapsing.

• New federal guidelines clarify that lawyers must report suspicious transactions—even if it involves their own clients.

• The Law Society of B.C. is under pressure to discipline non-compliant members.

• A B.C. lawyer is currently facing disbarment for assisting in five fraudulent conveyances involving offshore buyers.

How Developers Are Reacting

The 2025 anti-money laundering crackdown has landed like a thunderclap across Canada’s real estate landscape—and nowhere has the rumble been louder than in the developer community. Many of these firms, long accustomed to light-touch oversight and profit-heavy presales, are suddenly finding themselves in a compliance labyrinth that’s both expensive and invasive.

For developers, the new FINTRAC obligations mean not only stricter reporting of large cash transactions and beneficial ownership, but also a new level of scrutiny over their own partners, investors, and financing sources. Projects backed by foreign capital are under the microscope, with audits being launched into funding origins. Some developers are quietly backing out of upcoming land acquisitions or shelving future towers, wary of what a more aggressive enforcement regime might dig up.

Publicly, many developers claim to support transparency—“We welcome better practices,” as one press release from a major Vancouver developer put it. Privately, the atmosphere is tense. A number of real estate insiders say the crackdown has triggered a wave of internal reviews, as companies try to get ahead of possible investigations before regulators do. In Toronto, one luxury condo developer is rumored to have paused multiple projects pending internal “source-of-funds” verification.

For an industry that’s operated for decades in a largely hands-off environment, the sudden spotlight feels suffocating. One prominent builder put it bluntly:

“They’re treating us like we’re criminals, and we don’t know how to respond—because we’ve never had to before.”

Real Estate’s Lobbying Pushback

Predictably, the pushback from Canada’s real estate establishment has been swift—and aggressive. Since January, several industry associations including the Canadian Home Builders' Association (CHBA), the Canadian Real Estate Association (CREA), and multiple provincial developer groups have mounted a coordinated lobbying campaign aimed at watering down enforcement and slowing rollout.

Their main argument? That excessive regulation risks “overcorrecting” and paralyzing the very industry responsible for housing delivery in a time of acute crisis.

Behind closed doors, the strategy has been more tactical. Lobbyists are pressuring provincial regulators to delay adoption of federal guidelines, using affordability as leverage:

“If you clamp down too hard, we won’t be able to build anything,” is a recurring refrain in conversations with lawmakers.

They’re also pushing back against beneficial ownership disclosures, calling them “invasive,” and warning of capital flight. According to internal memos leaked to investigative journalists, multiple lobbying groups have quietly met with MPs and provincial ministers, asking for carve-outs or exemptions on the basis that “foreign capital is still essential to funding large-scale developments.”

One CREA representative told a closed-door committee:

“Yes, we need to clean up dirty money, but we can’t scare away clean investment in the process.”

So far, Ottawa has not budged—but the lobbying pressure is only growing.

Why Some Provinces Are Resisting the Reforms

While the federal government is rolling out these changes with fanfare, some provinces are moving like molasses. Alberta and Saskatchewan have expressed open skepticism, calling parts of the framework “federal overreach.” Even Ontario—despite facing its own housing affordability meltdown—has been dragging its feet on certain verification protocols.

Why the hesitation?

For starters, provincial regulators often lack the capacity to implement sweeping changes overnight. But more importantly, some local governments benefit—politically and economically—from the current opacity. Foreign capital and anonymous shell company investments have long propped up local markets. Municipalities rake in permit fees and tax revenues, while political donations from developers continue to pour in.

A former BC housing policy advisor put it plainly:

“You can’t expect provincial governments to self-police an economy they’ve profited from for decades.”

Meanwhile, in Quebec, privacy concerns have become a rallying point. The province has long maintained stronger data protection laws, and critics there argue that the new beneficial ownership databases could expose investors to identity theft or harassment.

Even in BC, which has publicly championed transparency, enforcement remains uneven. While the Land Owner Transparency Registry (LOTR) is now mandatory, compliance is still spotty—and there are few penalties for non-compliance.

Will This Crackdown Actually Work?

This is the billion-dollar question—and the answer is complicated.

Yes, the reforms represent a massive step forward. They close long-standing loopholes, increase oversight, and finally give FINTRAC the teeth it’s lacked for years. For the first time, Canada has a cohesive strategy to tackle the flood of questionable money flowing through property markets.

But experts warn: legislation is only half the battle. Enforcement remains patchy, and real estate remains a cash-rich, enforcement-light sector compared to finance or securities.

Critics also highlight the systemic nature of the problem. Dirty money doesn’t just enter at the point of purchase—it’s laundered through trusts, shell companies, proxy buyers, mortgage schemes, and construction contracts. Unless those entire pipelines are policed, the crackdown may simply reroute illicit funds through more complex channels.

And then there’s the courts. Canadian judges tend to interpret consumer protection laws narrowly—especially when real estate is concerned. If these cases are challenged, don’t expect swift justice.

“The system isn’t designed for speed,” says a former prosecutor with experience in white-collar cases. “We’re dealing with criminal-grade laundering through a civil lens.”

Still, public pressure is high, and the appetite for reform remains. If nothing else, the crackdown has set a new baseline: the era of impunity is ending.

What This Means for Buyers and Sellers

For average buyers and sellers, the immediate changes may feel abstract—but the ripple effects are real.

First, transaction times are getting longer. With stricter verification requirements and new ownership disclosure rules, even basic home purchases can take weeks longer to close. Some banks are now demanding additional documentation to prove income sources, even for Canadian-born buyers.

Second, pre-sale buyers are more vulnerable than ever. Developers facing financing challenges due to scrutiny may delay or cancel projects outright. And while contracts offer little legal recourse, buyers left in limbo are now at least aware of the risks—something the new public discourse is helping normalize.

Third, sellers in hot markets—especially those benefiting from anonymous capital—may find demand softening. In areas like Richmond, West Vancouver, or North York, where ownership opacity has been especially high, the slowdown is already palpable.

Lastly, realtors are caught in the middle. With stricter reporting duties, many are quietly exiting the high-end luxury space or avoiding clients with vague backgrounds.

“It’s just not worth the risk anymore,” one veteran Vancouver agent told us. “You can lose your license for a shady deal.”

The long-term upshot? A slower, more cautious market—and one where the shadow buyers may finally be forced into the light.

What Comes Next in 2026 and Beyond

As we look ahead to 2026, one thing is clear: this is not a blip. The anti-money laundering crackdown is part of a broader structural shift in how Canada regulates real estate.

Expect more lawsuits. Developers, investors, and even realtors will test the limits of the new laws. Expect more audits. FINTRAC has already announced plans to double its enforcement staff by mid-2026. And expect the next battleground to be international: Ottawa is now pressuring foreign governments for mutual disclosure agreements that could expose overseas investors using Canadian real estate to park wealth anonymously.

There's also pressure to expand the crackdown beyond just residential property. Commercial real estate, farmland, and industrial zones have largely flown under the radar—despite their growing use in money laundering networks. If the current reforms succeed, expect the net to widen.

Above all, expect continued public anger. Canadians are watching—especially younger generations locked out of the market. For them, the story isn’t just about crime. It’s about fairness, and whether housing is a right or a vehicle for global finance.

The real estate industry has had its run. Now, it’s the regulators’ turn.