Introduction

This is a continuation of the first post discussing the applicability of Canada’s vacant home taxes to U.S. residents. The first post is here.

@RepBrianHiggins launches campaign seeking "carve out" from Canada's @VacantHomeTax for US citizens. He argues that this CDN tax (based on citizenship) violates US/CAN tax treaty and #USMCA. What about US @citizenship tax and #FATCA imposed on CDNs? https://t.co/7KdrdhvnNe pic.twitter.com/Kjzdpv6wyQ

— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) February 17, 2023

You can see the complete twitter thread here.

A recent post describes how various Canadian Underused and Vacant property taxes might apply to unsuspecting U.S. residents (Toronto, Vancouver and Ottawa) and U.S. citizens (Canada’s Underused Property Tax).

Taxes that apply to ALL owners of property

Here is a series of tweets to show what filing the Toronto Vacant home tax looks like … This is so so intrusive. I will make this a thread.

— Penalty Taxes On Vacant, Empty Or Underused Homes (@VacantHomeTax) January 22, 2023

The Toronto, Vancouver and Ottawa taxes apply to ALL owners (regardless of citizenship or residence) of residential property. Although these taxes apply to all owners, some U.S. citizen/residents have argued that they are disguised taxes on being American. The broad scope of these taxes makes them difficult to challenge.

Taxes that apply to property owners based on citizenship or immigration status

Absolutely understand how unjustly the US owners of Canadian properties feel. But, they must understand that this is what the US does to Canada ALL DAY EVERY DAY! pic.twitter.com/Sr6PSRiM2Y

— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) February 17, 2023

Interestingly Canada’s Underused Property Tax, by its express terms applies based on “citizenship” and/or “immigration status”. Specifically, it applies to people who are neither citizens nor permanent residents of Canada. In the same way that the United States imposes taxes on people based on and only on the status of being a U.S. citizen or permanent resident of the United States (Green Card holder), Canada’s Underused Vacant Property Tax is based on NOT being a citizen or permanent resident of Canada. Significantly, certain provincial human rights codes (presumptively) prohibit discrimination based on citizenship. The first case decided by the Supreme Court of Canada (Andrews) interpreting S.15 of Canada’s Charter of Rights struck down a British Columbia statute requiring Canadian citizenship to practise law in British Columbia. In 1974 – In Re Griffiths – the U.S. Supreme Court struck down a similar Connecticut provision requiring U.S. citizenship to be admitted to the bar in Connecticut. In the United States, classifications based on citizenship/alienage are “suspect classifications” and presumptively unconstitutional. Canada’s laws and judicial decisions are generally hostile to classifications based on citizenship.

To be clear: classifications based on citizenship clearly attract judicial scrutiny!
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