$5M mansion owners pay very little income tax in Canada. Conservative candidate is fighting to protect them from BC’s speculation tax.

By Rohana Rezel

Jing Bai’s family owns and lives in a $5.7 million dollar mansion in Vancouver’s tony MacKenzie Heights neighbourhood in the affluent Westside of the city.

The family pays very little income taxes in Canada because the primary breadwinner Jing Bai’s husband is deemed a “non-resident” under Canada’s tax laws.

But Jing Bai’s family were assessed a speculation and vacancy tax bill of $31,270, equal to 0.5% of the assessed value of the property in 2018.

Jing Bai’s family is one of the many so-called “satellite families” – families who own expensive real estate in Canada while paying no income tax because the breadwinner is deemed a non-resident – who are required to pay a speculation and vacancy tax.

The BC NDP government introduced the tax in 2017 as part of a raft of new measures aimed at curbing rampant speculation in the Vancouver real estate market that was fuelling the region’s housing crisis.

Lawyer Kailin Che, the Conservative candidate for Vancouver-Granville at the upcoming federal election, thinks that a tax targeting wealthy homeowners like Jing Bai who pay little income taxes while living in expensive homes in Canada is unfair.

Che has launched a pro-bono lawsuit to have the speculation and vacancy tax repealed.

Che is arguing that the speculation and vacancy tax violates Canada’s Charter of Rights and Freedoms because it infringes on the mansion owners’ rights to “liberty, privacy and security of person”.

The Tory candidate is fighting to repeal a tax that is immensely popular in BC.

A survey conducted by Research Co. last year found that 76 per cent of BC residents were in favour of tax[1]https://researchco.ca/2020/01/03/british-columbia-housing-taxes/.

What’s more, an internal Canada Revenue Agency audit concluded 25 years ago but only published this week showed how wealthy new immigrants were buying up expensive real estate in and around Vancouver while declaring poverty-level incomes on their tax returns.

The news only came to light thanks to a five-year freedom of information battle waged against the CRA by South China Morning Post’s Vancouver correspondent Ian Young[2]https://www.scmp.com/news/china/diplomacy/article/3146957/canada-tax-agency-reveals-secret-study-linking-home-prices.

Vancouver-based software development manager Justin Fung has long advocated for making housing affordable to Canadians.

“This type of behaviour breaks the social contract we have as Canadians to contribute our fair share in taxes funding things like schools, health care and affordable housing programs,” Fung told me. “Kailin Che taking on pro bono legal work to help homeowners of a $5 million home avoid paying their fair share of taxes perpetuates a system that benefits those who bring wealth from overseas versus those earning local incomes.”

I’ve repeatedly reached out to Kailin Che asking her for an interview about housing and other issues on her platform. I’ve yet to hear from Che or her team.

Che’s main competitor for Vancouver-Granville is Liberal candidate Taleeb Noormohamed, who has denied being a speculator despite flipping 21 properties since 2005.

The NDP candidate in the riding is environmentalist Anjali Appadurai.

Jody Wilson-Raybould, who won the seat as an independent in 2019 after being expelled from the Liberal Party, is not seeking reelection.

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You can reach Rohana Rezel at [email protected] You can also find him on Twitter, Facebook and Github.

References   [ + ]

1. https://researchco.ca/2020/01/03/british-columbia-housing-taxes/
2. https://www.scmp.com/news/china/diplomacy/article/3146957/canada-tax-agency-reveals-secret-study-linking-home-prices