On July 5th, 2021, the British Columbia Court of Appeal ruled that the province’s foreign buyer’s tax is constitutional. This appeal concerned the constitutionality of an additional property transfer tax imposed by the Province of British Columbia, known as the foreign buyer’s tax. At the time the tax was brought into force in August 2016, it imposed an additional 15% transfer tax on a purchaser of residential property in the Greater Vancouver Regional District who was not a Canadian citizen or permanent resident. The tax was subsequently increased to 20% and expanded to include several other regional districts in the province.

When this matter was first heard at the Supreme Court of British Columbia, the judge found that the dominant purpose of the tax was to foster affordability of residential property in the GVRD by discouraging foreign nationals from purchasing real property in that area and thus reducing demand. He also found a secondary purpose to raise revenue for provincial purposes, including housing priority initiatives.

The claimant submitted that the tax provisions perpetuate disadvantage against non-citizens, as they impose a financial burden on non-citizens as a historically disadvantaged group. She says the tax is expressly intended to deter non-citizens from engaging in an economic activity—home ownership—that the trial judge acknowledged was a critical aspect of one’s social identity and a potent symbol of belonging and moral worth. She further submits that the tax reinforces, perpetuates or exacerbates disadvantage.

The BC Court of Appeal found that: “The legal effect of the law was to make it more expensive for foreign nationals to purchase residential property in an area where recent data showed that this group was purchasing a significant proportion of the housing market, raising serious concerns about ‘hyper-commodification of real estate”.

Having made that determination, the BC Court of Appeal further determined that: “…non-citizens suffer from political marginalization, stereotyping and historical disadvantage, and the appellant as a non-citizen can be said to be a person lacking in political power such that she is vulnerable to having her interests and rights overlooked. I do not accept, however, that this fact alone establishes discrimination where there has been differential treatment”.

In conclusion, the BC Court of Appeal found that the current social context in which the tax provisions were enacted is very different from the discriminatory laws of the past, some of which were aimed at discouraging immigration from Asian countries.