Class-action claim against province over Property Transfer Tax filed in B.C. Supreme Court

Wednesday, September 21st, 2016

Foreign homebuyer launches lawsuit

The Province

The B.C. government faces a class-action lawsuit over its tax on foreign homebuyers.

The suit has been filed in B.C. Supreme Court on behalf of non-Canadians who pay an extra 15 per cent of the value of a home under the new Property Transfer Tax Act.

If the lawsuit is certified by the court and succeeds, the province could be forced to repay millions of dollars.

Jing Li, a 29-year-old from China who lives in Burnaby, is leading the suit. She moved to Canada in 2013 to complete a master’s degree in public administration at the University of Saskatchewan. After completing her degree, she moved to Burnaby but never became a permanent resident of Canada.

On July 13, Li signed a contract to buy property in Langley for $587,895, according to the court documents. Li was required to pay a non-refundable deposit of $55,990 on July 20, just before the tax came into effect in August. She now argues that because of the tax she has to pay an additional $83,850.

The suit claims many other foreign buyers entered into contracts to purchase homes before the tax was announced or came into force, but their transactions did not close until after Aug. 2.

Her lawyer, Luciana Brasil, argues the additional tax discriminates against foreign buyers because of their status as foreign nationals.

“The beauty of a class action is that people out there who are similarly situated as my client will benefit from this,” she said, noting her client was willing to “bear the flag for the whole class.”

Brasil also says it goes against more than 30 international treaties whereby Canada is committed to treat foreign nationals just as favourably as citizens of this country, including citizens of the U.S., Mexico, China, Hong Kong, the Philippines, Mexico, Poland and Russia.

Brasil said the lawsuit seeks to overturn the legislation and demands repayment of any tax added to the purchase price of a home because of the buyer’s nationality.

The civil suit filed Monday also claims that only the federal government has the exclusive power over the conduct and regulation of foreign trade.

The B.C. Ministry of Finance issued an email statement that said it could not speak directly to the notice of claim “as it is currently before the court.”

“Generally, however, all legislation goes through constitutional and legislative analysis, and our view is the changes build on tax policy that has been in place for almost 30 years,” the statement reads. “The Constitution allows provinces to impose taxes within the province to raise revenue for provincial purposes.”

A judge must decide if the class action application can proceed and Brasil says it could take six months to a year to set a date for the lawsuit.

Lawyer Arnon Dachner, who specializes in real estate, isn’t surprised there’s already a suit filed on the foreign home buyers tax, and said it’s possible there will be others who come “out of the woodwork” with other suits. “New laws are always open to challenge and tax laws are no different,” he told Postmedia.

“I think it’s important for each person that is potentially subject to this (foreign home buyers tax) to look at their own circumstances and how those might fit inside or outside of the law, to determine whether they might have a claim.”

© 2016 Postmedia Network Inc

Comments are closed.