Canada Class Action Filed Over New Housing Tax

A Canadian class action lawsuit has been filed taking issue with British Columbia’s housing speculation and vacancy tax.

A group of homeowners have filed the taxation class action lawsuit against the government, claiming that the housing speculation and vacancy law is unconstitutional, because it goes beyond the proper power of the government.

CBC explains that the housing speculation and vacancy tax law was imposed in 2018 and was an effort to curb rising housing prices in British Columbia. Housing in the area is taxed at 0.5 – 2 percent. However, people who live in their houses, or who rent them, receive an exemption annually.

The tax law was a reported attempt at lowering house prices because some believed that homeowners buying multiple properties only to leave them vacant caused a housing shortage. Effectively, the new housing tax is imposed on second homes that are being left vacant, says CBC.

Now, the housing tax class action lawsuit claims that the new law is having unintended consequences on numerous residents. Nine homeowners filed the housing tax class action lawsuit, one of whom said that the “law is like a sledgehammer that’s having unintended consequences.”

According to the Canadian homeowners’ housing tax class action lawsuit, the new law unfairly affects women and seniors.

Allegedly, many people whose homes should not be subjected to the tax are forced to pay it nonetheless because the law is overly broad. The law does not actually target real estate speculators who buy homes and then leave them empty, reports CBC.

The housing tax class action lawsuit illustrates the “overly broad” and damaging effects of the law with the story of one of the nine lead plaintiffs. Claire Carlin says that she and her husband have been married for 30 years, but she lives in British Columbia and he in the U.S. 

Under the new law, her home is reportedly considered a second home and she is considered a “satellite family.” Carlin says that this determination was made because her retirement income is lower than his, so his home in the U.S. is considered the family’s primary residence simply because he makes more money. 

Carlin goes on to say that the law then determines that her residence is a secondary one and as as result, will hit her with more than $20,000 in taxes. Carlin states that the home is not a satellite home because it is her primary residence and only her name is on the title. 

Carlin says the impact of the new tax is serious — she may be forced to sell her home because she cannot afford to pay taxes.

According to the housing tax class action lawsuit, many other people are similarly affected. Allegedly, the law unfairly affects women and seniors in situations like Carlin’s.

The government did not comment on the specifics of the housing speculation and vacancy tax, but expressed optimism that the new law would largely work as intended, help lower prices, and ultimately help mitigate the rental crisis.

Have you been impacted by the housing speculation and vacancy tax law? Let us know your experience in the comments below!