Dear Editor,
Re: "Richmond resident at a loss after spec tax exemption revoked"
I am a partner with Andersen LLP in Vancouver and a long-time Richmond resident. We provide Canadian and US tax advice to our cross-border clients. Our firm has advised on the impacts of B.C. Speculation and Vacancy Tax (“B.C. SVT”) legislation to our US and Canadian clients.
Families with unusual situations get caught by the “Untaxed Worldwide Earner” definition and are required to pay B.C. SVT even where the home is occupied. While this is the intent of the legislation, the concept catches families that should never be subject to this tax.
While the legislation allows for exemptions and credits for certain situations, they do not work in others.
Follow-up advice for such clients would be either to not purchase a property in B.C. and instead rent or avoid getting married/get divorced and avoid the status as an “Untaxed Worldwide Earner.”
The former solution does not provide any more homes for occupancy in B.C., the latter is a ridiculous and impractical solution.
I am disappointed the province continues to pursue B.C. SVT for long-time Richmond resident Tony Chan. His situation has been documented in the media for years; he is subject to B.C. SVT for marrying a US resident whose income is higher than his own.
Situations like his can and should be resolved by the province in the owner’s favour.
One solution is a legislative amendment where a homeowner’s history as a resident and taxpayer in B.C. is considered.
Homeowners caught by the “Untaxed Worldwide Earner” definition should receive credit or exemption against B.C. SVT for each year they both resided in British Columbia and paid income tax, building to a complete exemption from B.C. SVT after a long-time of B.C. residency and contribution to our community.
Such a change would prevent the unintended consequences the “Untaxed Worldwide Earner” definition has on families.
A second solution would be to evaluate situations like Mr. Chan on a case-by-case basis and exempt families that clearly should not be subject to B.C. SVT.
Other jurisdictions such as the City of Vancouver amended their Empty Homes Tax over the years where the original legislation did not work as intended.
B.C. SVT is more than five years old and the definition of “Untaxed Worldwide Earner” is catching families that should not be subject to it. The province should amend the legislation to fix this problem.
Steven Flynn, CPA/CA, CPA (Wash.)
Richmond
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