B.C. real estate tax called unconstitutional
Proposed class-action lawsuit brought against province
VANCOUVER — A 15 per cent tax on foreign homebuyers in Metro Vancouver is unconstitutional and unfairly discriminates against people from Asia, a proposed class-action lawsuit against the B.C. government argues.
An amended document filed in B.C. Supreme Court last week argues the foreign-buyers’ tax is unconstitutional because it violates equality rights by making an “arbitrary” distinction between those who are citizens and permanent residents of Canada and those who are not.
“The disadvantage perpetuates prejudice and stereotyping on the basis of national origin,” the 26-page lawsuit said. “The foreign nationals’ property tax is disproportionately felt by persons whose national origin is from an Asian country, a class of persons that have historically suffered discrimination in British Columbia.”
The lawsuit, originally filed in September, said the tax unfairly assumes foreign nationals are wealthier than Canadians, and argues it violates dozens of international treaties guaranteeing equal treatment to non-Canadian citizens and permanent residents.
The B.C. government introduced the foreign-buyers’ tax with little warning last summer in an effort to quell Metro Vancouver’s overheated real-estate market, which saw July prices for detached homes soar 38 per cent over a single year.
The law was passed on July 28 and came into effect five days later, sparking a frenzy to complete property transfers before the tax kicked in on Aug. 2. The move prompted the province’s Land Title and Survey Authority to extend its hours and its availability over the long weekend.
A spokesman from the province’s Finance Ministry confirmed in an email Monday the government had received the amended notice of claim and would file a response in due course. “As this case is currently before the court, it would be inappropriate to comment on the specific matters that have been raised,” Jamie Edwardson said.
The representative plaintiff in the proposed class action is Jing Li, a Chinese national who learned she would have to pay an additional $83,850 on a $587,895 home in Langley that she agreed to purchase days before the government announced the new tax.
Li moved to Canada in 2013 to complete a master’s degree in public administration at the University of Saskatchewan. She later moved to Burnaby before putting an offer on the Langley home. Eight days before the law was announced, Li paid a non-refundable deposit of $55,990, which she would have had to forfeit had she been unable to come up with the extra money for the tax.
“On Nov. 18, 2016, Ms. Li completed her purchase and did in fact pay $83,850 in foreign nationals’ property tax,” the lawsuit says. “Had Ms. Li had a Canadian passport or permanent resident status, she would not have had to pay this additional amount.”
The court document describes the disadvantage the tax places on non-Canadians and non-permanent residents as arbitrary because it assumes foreign nationals are richer and better able to outbid domestic homebuyers. “Nationality and citizenship are not related to wealth,” the lawsuit said.
“The foreign nationals’ property tax is over-inclusive because many persons who are neither Canadian citizens nor permanent residents have no more wealth than Canadian citizens or permanent residents.”
This year, Premier Christy Clark tweaked the rules around the law, exempting anyone living in B.C. on a work permit and who pays taxes in the province.