It's taken just over six weeks, but B.C.'s controversial tax on foreign home buyers is now facing a major legal challenge.The story explains how a Chinese student scraped together the money for a 10% deposit on a Vancouver house, before the tax, and signed a contract to buy the place. The tax means she has to find an amount of money one and a half times bigger than her deposit to pay the tax, or abandon the deposit and void the sale.
A class-action lawsuit has been filed in B.C. Supreme Court on behalf of virtually all non-Canadians who have been forced to pay an extra 15 per cent under amendments to the Property Transfer tax act.
If the lawsuit is certified by the courts and succeeds, the province could be forced to repay hundreds of millions of dollars — much of the expected revenue now earmarked to pay for affordable housing for British Columbians.
Among the interesting grounds for challenge:
The suit argues the provincial government has acted outside its jurisdiction, and that only the federal government has the exclusive power over "the conduct and regulation of foreign trade, aliens and the regulation of trade and commerce."
The lawsuit also claims the additional tax has the "sole effect of discriminating against [foreign buyers] because of their status as foreign nationals."
And that, her lawyer argues, violates more than two dozen international treaties that Canada has signed with nations ranging from Argentina and China, to Russia and the United States — the latter covered by NAFTA, the North American Free Trade Agreement.