Supreme Court won't hear challenge to B.C. foreign buyers tax
The Supreme Court of Canada will not hear a Richmond couple's challenge to British Columbia's foreign buyer's tax. The couple argued they should owe the tax only on the 5 per cent of their condo registered to the husband, a foreign national, and not on the 95 per cent registered to the wife, a Canadian citizen.
On Thursday the court dismissed, with costs, Li-Yuan Chuang and Chia-Wen Hsia's application for leave to appeal. As is usual for leave decisions, it gave no reasons. The ruling leaves in place a January decision of the B.C. Court of Appeal. That court held that when a Canadian co-owner holds part of a property in trust for a foreign buyer, the 15 per cent additional tax applies to the whole property.
A 95–5 split on title
The couple, then engaged, bought a pre-sale unit in Richmond in 2014. In August 2016, before the sale closed, B.C. brought in the additional property transfer tax, widely known as the foreign buyer's tax, for Metro Vancouver. When the purchase completed in March 2017, Hsia was registered as owner of 95 per cent and Chuang, who was neither a citizen nor a permanent resident, as owner of 5 per cent. They declared a value of $474,500 and paid $3,558.75 in additional tax, 15 per cent of Chuang's 5 per cent share.
The registration did not match who had paid for the unit. According to the court record, Chuang paid 40 per cent of the price and Hsia's mother paid 60 per cent. A provincial auditor concluded Chuang had a larger beneficial stake than his 5 per cent on title. On that basis the auditor treated Hsia as a "taxable trustee" holding part of her share in trust for him, and assessed the tax on the full value of the unit.
The couple appealed to the finance minister. They said Chuang had given his share to Hsia ahead of their December 2017 wedding. In a statement Hsia made in Taiwan in 2018, she described his 5 per cent as a token of his interest, citing the custom of a husband buying a home for his wife. The minister was not persuaded. Under the law, when someone pays toward a property that is put in another person's name, the courts presume it is held in trust for the person who paid, not given as a gift, unless there is evidence to the contrary. The minister did reduce the value used for the tax from the $777,000 assessed value to the $474,500 the couple declared, but kept the tax on the whole property. At 15 per cent, that comes to roughly $71,000, compared with the $3,558.75 the couple paid.
The courts' reasoning
In 2024 Justice Sharma of the B.C. Supreme Court upheld the assessment. She found Hsia's statement inadmissible as "triple hearsay", since it reached the court only as an attachment to a lawyer's letter exhibited to a legal assistant's affidavit. She added that it would not have rebutted the presumption of a trust in any case.
Before the Court of Appeal, the couple no longer disputed that Hsia held some of the property in trust for Chuang. They argued instead that the tax was never meant to fall on Canadians. In their view Hsia wore two hats: a trustee for about 35 per cent and an owner in her own right of about 60 per cent. Only the foreign-linked share should be taxed, they said, which would mean 40 per cent of the property at most.
Writing for a unanimous panel, Justice Fleming rejected that reading. The Property Transfer Tax Act's definition of "taxable trustee", Fleming wrote, deliberately covers Canadians holding property in trust for a foreign buyer. The aim is to stop foreign investors from avoiding the tax by having others hold their stake. Under the act, if every buyer on title is a foreign entity, a taxable trustee or both, the tax applies to the full value of the deal. The act does not require the province to work out exactly how much of a trustee's share belongs to the foreign beneficiary.
The court also rejected the couple's argument that a separate clause, which treats the registered owner as the full owner for tax purposes, wipes out any trust. That clause was added in 1991 to close a loophole, Fleming wrote. Reading it as the couple did would make the taxable-trustee rules "meaningless".
Fleming acknowledged that the couple saw the result as "profoundly unfair", but noted that if they had registered title according to what each had actually paid, the tax would have applied to 40 per cent of the value, not 100 per cent. Taxing the trustee’s full registered interest gives taxpayers clarity and consistency, the judge wrote. The alternative would require the province to determine each foreign beneficiary's share case by case.
What it means for buyers
With the Supreme Court declining to step in, the Court of Appeal's ruling stands as the leading interpretation of how B.C.'s foreign buyer's tax applies to mixed Canadian and foreign purchases. When a Canadian co-owner's registered share is partly held in trust for a foreign national, and no other buyer on title is free of foreign links, the tax is levied on the entire property, not just the foreign portion.
Sources: Supreme Court of Canada, Li-Yuan Chuang, et al. v. His Majesty the King in Right of the Province of British Columbia, file no. 42258, judgment on leave, Nov. 12, 2026; Chuang v. British Columbia, 2026 BCCA 10; Chuang v. British Columbia, 2024 BCSC 2422.