Richmond woman claims foreign-buyers tax appeal wrongfully rejected by Finance Ministry over ‘absurd’ and ‘excessively narrow’ take on Property Transfer Tax Act

BIV's lawsuit of the week

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A permanent resident who bought a Richmond home and was hit with a $237,000 foreign-buyers tax bill is taking the provincial government to court, claiming “absurd” hairsplitting by the Ministry of Finance unfairly sank her chance to appeal the assessment.

Zi Yang, a Chinese citizen and permanent resident of Canada, filed a petition in BC Supreme Court on May 23, claiming her attempt to officially object to the tax bill was wrongfully rejected by the Finance Ministry. Yang claims she bought a home on Wintergreen Avenue in March 2017, intending to live there as her primary residence. But to obtain a mortgage, Yang claims, she needed a guarantor and placed a 1% interest into the name of her ex-husband, a citizen and resident of China. In paying the property transfer tax on the sale, Yang paid the foreign-buyers tax on only the 1% registered in her ex-husband’s name.

Months later, a property transfer tax administrator initiated an audit of the transaction, but Yang was unable to “respond to the administrator in a timely manner due to English language barriers,” the petition states, adding that she later enlisted the help of her realtor to translate.

In February 2018, Yang was hit with a $237,600 tax bill, with authorities finding that her 99% stake in the property was also subject to the foreign-buyers tax. Yang sent a letter weeks later to the auditor on the file disputing the assessment, and hired an accounting firm and legal counsel to aid in the appeal process when the auditor remained unmoved.

However, the director of the appeals branch refused to treat Yang’s letter as an official “notice of objection,” claiming that she failed to follow instructions on her assessment and sent the letter to the wrong recipient. 

“The Minister’s excessively narrow interpretation of ... the act leads to the absurd and unequitable consequence that an objection will only be valid if sent ‘c/o Tax Appeals and Litigation Branch,’ such that had the petitioner’s letter been sent ‘c/o’ that branch it would be valid, but because it was sent ‘c/o’ the Property Tax branch it was not,” the petition states. “The petitioner, however, is not a professional tax practitioner. As a lay person and immigrant who struggled with English as a second language, the petitioner cannot be expected to be familiar with the Ministry’s administrative practices and cannot be subjected to requirements that are more stringent than those set out in the act.”

Yang seeks an order compelling the minister to issue a decision based on her objection letter of the tax assessment. The petition’s factual basis has not been tested in court and the provincial government had not responded by press time.