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University Student Leads Class-Action Lawsuit Against British Columbia

The repercussions of British Columbia’s newly imposed “foreign buyer tax” have finally hit the provincial government.

No, not a cooled down housing market, as was the ideal end-goal for the tax. Rather, a university student from China has filed a class-action lawsuit against the B.C. government, and a multitude of foreign nationals are now rallying behind the act.

Originally put in place to cool down the Vancouver housing market, which has experienced unprecedented and problematic growth in prices over the last few years, B.C.’s foreign buyer tax specifically targets all foreign nationals purchasing property in the province, as the name would suggest.

The tax forces anyone from outside of Canada to pay an additional 15 per cent on any real estate purchase. Funds gained through the tax are meant to fund affordable housing developments in British Columbia.

But while the original plan looks fine on paper, in practice the foreign buyer tax can be considered outright racist.

Anyone familiar with the ongoing housing crisis in Vancouver (and Toronto) will know that a large number of foreign buyers are coming from the People’s Republic of China. Jing Li, 29, the university student who filed the class-action lawsuit against the B.C. government, is an example.

But while many assume that Chinese buyers coming to Canada to purchase property are so financially well-off that an extra 15 per cent tax won’t mean much, that isn’t quite a reality.

Again, Li serves as a prime example. As recounted by CBC, Li managed to acquire enough funds ($560,000) to put a down payment on a property in July. But not even two weeks later, the foreign buyer tax came into effect, slapping on another $84,000 to Li’s total.

Unable to go back on her deposit, and simlarly unable to pay the added fee, Li was put in a very serious dilemma. And so recognizing the inherent problems with the foreign buyer tax, Li filed a civil claim early this week and is now representing the multitudes of foreign buyers seeking to purchase real estate in Canada.

According to Li’s lawyer, the B.C. provincial government does not hold the power to impose a tax of this nature, as the “regulation of trade and commerce” is in the federal government’s jurisdiction. The foreign buyer tax is then cited as inherently discriminatory and goes directly against about 24 different international treaties signed by the Canadian government.

Until the claim is certified by the B.C. Supreme Court, which could take years, the foreign buyer tax will remain in effect. Once the long waiting time is over, however, this lawsuit will no doubt change the legal landscape of British Columbia and definitely go down in Canada’s legal history books.

Featured image courtesy of: Magnus L3D

Michael D'Alimonte

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