B.C. Supreme Court judge rejects injunction sought by homeowners against speculation tax

A B.C. Supreme Court judge has rejected an application for an interim injunction to halt collection of the province's speculation tax while homeowners fight the tax in a proposed class action lawsuit.

The homeowners sought to have the tax suspended while the legal challenge to the provincial tax was before the courts on the basis that being forced to pay it would cause them "irreparable harm."

However, the judge ruled against the injunction, partly on the basis that if the lawsuit succeeded, the homeowners would likely be entitled to refunds of the tax.

"I am not satisfied that the petitioners have established irreparable harm in the context of a constitutional case," wrote Justice Janet Winteringham in her reasons for judgement.

Lawsuit says tax 'unconstitutional'

The complainants in the suit are nine homeowners from Greater Victoria and Metro Vancouver who allege B.C.'s speculation tax is unconstitutional and beyond the power of the provincial government.

The B.C. government brought in the speculation and vacancy tax in November 2018 to help cool the real estate market and curb the number of empty properties in real estate hot spots in the province, including Metro Vancouver, the Fraser Valley, the Capital Regional District, Kelowna, and a few other municipalities.

It is levied between 0.5 and 2 per cent of a home's assessed value. The highest rate is applied to foreign owners and satellite families.

Tax is a cash grab, says lawyer

With their application for an injunction rejected, some of the lawsuit's complainants face tax assessments in the tens of thousands for 2019.

One of them, Debbie Lynn King, anticipates receiving a tax assessment of approximately $29,800.

King, a Canadian citizen and mother of two autistic children, owns a property in Victoria with her spouse who lives and works in the United Arab Emirates. In the lawsuit, King states that although she and her children live at the Victoria home full time, she is taxed as an "untaxed worldwide earner" because her spouse's non-Canadian earnings exceed her income.

Vancouver lawyer Lawrence Wong is handling the lawsuit. At the time it was filed he called the tax a "cash grab" by the provincial government.

"The government calls it a speculation tax and unfortunately the people who are affected are seniors and homemakers and people who are married to foreign spouses."

Province says tax is working

The B.C. government says it brought in the anti-speculation measure because rich investors were driving up market prices by buying homes and condos, then leaving them vacant.   

Finance Minister Carole James has not commented on the specifics of the case as it is still before the courts.

However, James has said the speculation and vacancy tax is a "key measure to tackle the housing crisis in B.C.'s major urban centres" and maintains "99.8 per cent of British Columbians are exempt from paying the tax."

The province says that the tax incentivizes owners to turn underutilized homes into homes for renters. As of this March, the government says it has also raised $115 million to fund housing initiatives.