Focus On

REAL PROPERTY TAX - Land transfer tax - Foreign buyers tax

Tuesday, August 03, 2021 @ 9:32 AM  


Lexis Advance® Quicklaw®
Appeal by Li from the dismissal of her action that challenged the constitutionality of amendments to the Property Transfer Tax Act. The amendments imposed an additional transfer tax on foreign purchasers of residential property in specified areas of the province where foreign demand was shown to contribute to rising prices. The appellant was a Chinese citizen who moved to British Columbia in 2016. She held a valid work permit but was not a permanent resident of Canada. In 2016, she purchased a residential property in Langley and was required to pay the additional 15 per cent property transfer tax.

HELD: Appeal dismissed. The amendments were not ultra vires the province. The dominant purpose of the tax, its pith and substance, was to address the problem of housing affordability by discouraging foreign nationals from purchasing residential property in specified areas, which was a matter in relation to property and civil rights under s. 92(13) of the Constitution Act and only incidentally affected the federal powers over aliens and international trade. The legislation was not inoperable under the federal paramountcy doctrine. There was no operational conflict between the legislation and the Citizenship Act or the North American Free Trade Agreement (“NAFTA”). The additional tax did not prevent foreign nationals from acquiring and owning residential property but simply imposed a more stringent requirement on them to pay a higher transfer tax on purchase. The legislation did not violate s. 15(1) of the Canadian Charter of Rights and Freedoms (Charter). The provisions did not create a distinction based on citizenship or national origin. They created a distinction based on immigration status, which was not an enumerated or analogous ground under s. 15 of the Charter. They did not perpetuate a real disadvantage to the group of non-citizens affected by the tax. No negative stereotypical assumption made against the affected subset of non-citizens was perpetuated by the tax. The tax was not predicated on anti-Chinese prejudice.

Li v. British Columbia, [2021] B.C.J. No. 1405, British Columbia Court of Appeal, B. Fisher, S.A. Griffin and P.G. Voith JJ.A., June 29, 2021. Digest No. TLD-August22021002