Premier John Horgan and Finance Minister Carole James take questions in the B.C. legislature. (Hansard TV)

Homeowners hire lawyer to fight speculation tax

B.C. government notified of pending class action lawsuit

A group of homeowners has hired a lawyer to prepare a class action lawsuit challenging the B.C. government’s speculation tax on second homes.

A fundraising page started by a group called Canadians Against the B.C. Spec Tax had raised more than $8,000 by Friday morning, and their lawyer sent a letter to the B.C. Attorney General and finance ministries asking for documents to be retained for the case.

“We also expect the class will include American homeowners who are also adversely affected by the proposed tax,” wrote lawyer Shayne Strukoff of international law firm Gowlings WLG.

“Given the substantial financial burden that the tax would impose on homeowners, the tax would effectively restrict the ability of Canadians living in provinces outside of B.C. to live in B.C. In our view, such restriction would violate the interprovincial mobility rights guaranteed to Canadians by Section 6 of the Charter.”

RELATED: Arizona vacationers consider suing over tax

Introduced in the February budget as an extension of the empty home tax imposed by the City of Vancouver to target mainly foreign real estate investors, the area affected by the tax was whittled down to major urban centres after an outcry from people with vacation homes.

It now captures about 32,000 properties, 20,000 of which are owned by B.C. residents, James confirmed in debate on her ministry’s budget this week. This prompted a renewed attack by opposition MLAs, who say it still isn’t a speculation tax but rather an asset tax on people with second homes.

James stressed that 99 per cent of B.C. residents won’t pay the tax, and it is needed to promote rentals.

“One per cent who have second or third or fourth homes that they own in the regions that we’ve targeted will pay the speculation tax, if they choose not to rent their place out,” James said Thursday. “We’re in a housing crisis.”

James rolled back the extent of the tax in March after protests from vacation homeowners, exempting the Gulf Islands, Parksville, Qualicum Beach, the Juan de Fuca region in Premier John Horgan’s constituency and rural areas of the Fraser Valley and Central Okanagan.

It currently applies to Metro Vancouver, Greater Victoria and the municipalities of Nanaimo, Lantzville, Abbotsford, Chilliwack, Mission, Kelowna and West Kelowna. It is to take effect based on 2018 assessed property values, at 0.5 per cent for B.C. residents and two per cent for foreign owners and “satellite families” who don’t pay income tax in B.C.

Albertans and other Canadians whose principal residence is outside B.C. will pay 0.5 per cent in 2018 and one per cent in 2019 and later.

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