A Hong Kong woman is suing her ex-boyfriend, demanding he be removed from the title of a single-family home she claims to have bought under his name to avoid paying a 15 per cent tax on residential properties for non-residents.
According to a notice of civil claim filed in B.C. Supreme Court on Sept.18, Jennie Ka Yu Wu is asking to have Richmond resident Johnny Pak Shing Chu removed from title of the property, a new single-family home at 7488 Langton Road.
The two have known each other through mutual friends since October 2014 and began dating last November.
Then, “the Plaintiff (Wu) began to discuss how the Defendant (Chu) would be able to assist her in the purchase of this home, knowing that the eventual home will be the sole property of the Plaintiff.”
The business woman claims she paid for the home partly in cash in February of this year, and Chu, a flight attendant, contributed nothing.
BC Assessment shows the last sale date for the property was Jan. 11 for $2,349,000. It is a new home built on the site of an old duplex. The property was valued at $2,248,000 as of July 1.
So, roughly $350,000 in taxes, targeted for social housing for poor people, was avoided by transferring title to the Richmond resident.
Wu’s claim has raised eyebrows regarding compliance of the foreign homebuyers’ tax and loopholes surrounding beneficial ownership.
Surrey-based real estate lawyer Jon Singh told the Richmond News that “by the letter of the law this is most likely tax evasion; it’s not tax avoidance.”
Singh said there’s an important distinction between giving someone money to buy a home, that is the beneficiary’s to keep and giving someone money with the intent to keep the home and skirt around taxes.
He noted a case such as this is an example of various reports of students and homemakers (or in this case a flight attendant) owning multi-million dollar homes in Vancouver and Richmond.
As the claim notes: “The Defendant agreed to act for the Plaintiff as an agent in purchasing the property which included obtaining the mortgage, and thereby is on title and holds the property on a constructive trust for the Plaintiff in accordance with . . . the Land Title Act.”
In August Wu ended the relationship via text message and asked for Chu to leave the home and sign over the house to her. He refused, she claims.
Wu claims while dating they would have overnight stays at each other’s residences in Hong Kong — where Chu would be on layover — and Vancouver — where Wu conducted “frequent” business — but they “did not live or reside in a marriage-like relationship.”
Importantly, Wu is asking for a declaration that the two were not spouses as defined in the Family Law Act. As such, Wu claims, “the defendant has no right or interest in any legal or beneficial interest in [the] property.”
She’s also seeking compensation for unlawful occupation of the house, back rent, as well as punitive damages, which are not detailed in the claim.
Wu says she has paid the property taxes and all the monthly mortgage payments.
Meanwhile, the two have continued to cohabitate in the house, but in separate bedrooms, while she visits Richmond.
Wu has two children from a previous marriage that ended in 2005 while Chu has one from a previous marriage that ended in 2009.
Singh said even if Chu transfers the title, Wu will still have to pay the property transfer tax and foreign homebuyers’ tax based on the fair market value of the property (as typically determined by a notary or lawyer), assuming she is still a non-resident.
Asked if he has seen or heard of more of such cases, Singh said he couldn’t say anything for certain but his guess would be there are or will be more.
“As Warren Buffet says, when the tide goes out you see who’s swimming naked.”
