Real Estate

A class action lawsuit in B.C. will challenge new speculation tax

cabin Photo by a2l/Shutterstock

As the March 31 deadline approaches for B.C. property owners to file their Speculation and Vacancy Tax declarations, cabin owners in Belcarra, a pretty village on the outskirts of Vancouver, are considering launching a class action suit to challenge the new legislation.

They may also join the Unfair Vancouver Vacant Homes Tax Coalition, which recently broadened its base to include the Speculation Tax in its constitutional challenge “because the legal arguments are the same,” says Rainer Borkenhagen, who leads the coalition.

The problem is that the tax, which was designed to penalize foreign buyers who purchase properties in B.C. and then leave them vacant, has also snared decades-old B.C. cabins. Nancy Strain’s tiny, rustic A-frame, which her father built in 1964, is an example. For the 2018 tax year, the 71-year-old widow must pay an additional $5,000 (0.5 per cent of the assessed value), on top of her $5,000 property tax bill, unless she declares that she lived there full time or rented out the property last year. But even if Strain wanted to, it would be impossible to rent out her cabin in the winter. It is uninsulated and has only a fireplace for heat. And she doesn’t want to give up the precious summer months, when she uses it herself.

Despite numerous appeals, the government has refused exemptions for communities such as Belcarra. “I feel we’re a test to see if they can tax bare lots and cabins,” says Sy Rodgerson, who has owned property in Belcarra for 17 years. “If they don’t get any pushback, they will roll it out to the rest of the province.”

You can be sure other provinces will be watching, he warns. “I think cabin owners across Canada should be very, very concerned.”

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