Chuang – BC Court of Appeal finds that the foreign buyer’s tax applies to all of the purchase price of a Canadian who acquires in part for a non-resident beneficiary

Ms. Hsia, a Canadian citizen, and her fiancé, Mr. Chuang, a foreign national, bought a residential property in a “specified area” (i.e., subject to the foreign buyer’s tax) of B.C. Mr. Chuang contributed 40% of the purchase price but registered a 5% interest on title, while Ms. Hsia registered the remaining 95% interest and her mother contributed 60% of the purchase price.

The additional transfer tax (“ATT”) imposed pursuant to the Property Transfer Tax Act (B.C.) (the “PTTA”) was paid based on 5% of the declared fair market value of the property. The Chambers Judge concluded that, by operation of law (i.e., resulting trust), Ms. Hsia held a substantial portion of her registered 95% interest in trust for Mr. Chuang.

On this basis, Fleming, J.A. concluded that ATT had been correctly assessed on the FMV of the property. In particular:

• Ms. Hsia was a “taxable trustee” under the s. 2.01 definition, i.e., although she was not a foreign entity herself, she was the trustee of a resulting trust for a “foreign entity” (Mr. Chuang), who held a beneficial interest in the residential property to which the transaction related; and
• accordingly, s. 2.02(5)(a) applied, which provided that the ATT was to be calculated on the (total) transaction FMV where each transferee was a foreign entity or a taxable trustee.

Fleming, J.A., indicated that thus the “legislature expressly contemplates a Canadian transferee being liable for the additional transfer tax as a taxable trustee”, i.e., “the definition of a ‘taxable trustee’ captures both a foreign entity and a Canadian entity holding some interest in property in trust for a foreign entity”.

Neal Armstrong. Summary of Chuang v. British Columbia, 2026 BCCA 10 under Property Transfer Tax Act (B.C.), s. 2.02(5)(a).