India must take the lead on G20 proposal to track cross-border property deals
reality. India, as chair of the G20, has sensibly pressed for finding ways to enhance international tax transparency in real estate. The outcome is the Organisation for Economic Cooperation and Development (OECD) outlining a robust framework to track tax evaders using real estate deals to hide their undeclared incomes.
The framework involves jurisdictions (countries) capturing electronic records on property ownership, creating registries to identify the beneficial owner, and sharing real-time information on overseas real estate deals. The G20 New Delhi Leaders Declaration on Saturday noted the OECD’s latest work. The diplomatic term ‘noted’ indicates there isn’t consensus on the matter yet.
And since the G20 does not have any implementation mechanism, a lot depends on what countries do. Still, a follow-up by subsequent presidencies would make sense as real estate continues to be a sink for black money, discouraging transparency on wealth and income. That this needs to change cannot be contested.
Globally coordinated media investigations, the Pandora and Paradise Papers, for example, revealed many powerful elites, including Indians, use offshore companies and trusts in tax havens to hold their wealth. A substantial amount of investment also went into real estate through offshore companies. While every action is not mala fide, some certainly are.
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