Canada’s Tax on Being American

Vancouver, where I have a condo, is trying to soak outsiders.


Vancouver, Canada, Aug. 15.
Vancouver, Canada, Aug. 15. PHOTO: BAYNE STANLEY/ZUMA PRESS

My husband and I were living in California when, in 2002, we used retirement funds to buy a picturesque condominium in Vancouver, British Columbia. Over the next 15 years, we paid our property taxes, tried to be good neighbors, and supported the local economy. Then last year the welcome mat was pulled from under our feet.

For decades the U.S. and Canada have been tangling over trade issues, like rules on dairy products and softwood lumber. But Canada’s latest creative attack is on the retirement savings of Americans like me. President Trump may have a point when he says that “people don’t realize Canada’s been very rough on the United States.”

In August 2016, Vancouver introduced a 15% tax on real-estate purchases by foreigners. Within eight months, the levy had scooped up 102 million Canadian dollars. The tax was implemented so abruptly—going into effect six days after it was passed—that buyers in escrow either had to lose their down payments or cough up an additional 15% of the purchase price. 

A few months later, Vancouver introduced an annual “empty home tax” equal to 1% of the property’s assessed value. Since the levy is inapplicable if your Vancouver home is your principal residence, it’s obviously aimed at foreigners like us. At our condo’s current valuation, the tax will cost us almost US$33,000 a year.

According to the Vancouver Sun, the city will ensure compliance by relying on “snitch-and-audit enforcement.” Neighbors will be “leaned on” to help uncover homes claimed as principal residences that actually aren’t. When the public objected to the tax, the Vancouver City Council’s response was simple: pay up, rent out your property, or sell.

Renting our place out for at least six months a year would circumvent the tax. Except that our condo rules require a minimum lease of six months. This is impractical given that we want to be there during the summer and allow friends and family to stay periodically throughout the year. Even worse, if we did decide to rent, we’d be liable for “deemed disposition” taxation and would have to file a Canadian return, even though we’re Americans.

Nationality-based taxes are among the worst kinds of protectionism. The North American Free Trade Agreement expressly covers real estate owned by Americans in Canada. For that matter, Nafta covers real estate owned by Canadians in the U.S., of which there is plenty.

When America’s neighbors buy U.S. property, they aren’t targeted for extra taxation. Canadians are quick to criticize Americans for protectionism, but if Phoenix and Palm Springs were to pull the same stunt as Vancouver, the squawking of the “snow birds” from up north would be deafening.

With Prime Minister Justin Trudeau at the helm, Canadians are reveling in international adoration, which stokes their national self-identity of kindness, politeness and fairness, supposedly in contrast to their brutish southern neighbors. Perhaps it’s time Canada practiced what it preaches.

Ms. McCallum is a retired professor of psychiatry and behavior sciences at Stanford Medical School.

Appeared in the September 12, 2017, print edition.

12 responses to Canada’s Tax on Being American

  1. John Richardson September 12th, 2017 at 9:45 pm

    “Nationality-based taxes are among the worst kinds of protectionism.”

    Yes, agree with you totally! And that’s why the United States must stop imposing income taxes on Canadian residents (who happen to have U.S. nationality). Yes, you read right. The United States is imposing imposing taxes on the Canadian earned income of those Canadian residents who were born in the United States. You see (and since you think nationality taxes are unjust) the United States of America is requiring Canadian residents who had the misfortune to be born in the United States to pay income taxes to the United States. Not only that, but they are required to report all their local Canadian bank accounts to the Internal Revenue Service.

    And all because they were born in the United States, making them technically U.S. citizens. Oh and if those unfortunate people (who clearly lost the “birth lottery” by being born in the United States) attempt to renounce their unwanted U.S. citizenship they:

    – are required to pay a $2350 fee (Soviet style) to the IRS

    – may have to pay an Exit Tax which includes a share of their Canadian earned pensions.

    So, since you obviously see the injustice of “nationality taxes” in your specific situation, I suggest that you write put your complaints about “nationality taxation” to the U.S. Government.

    I do agree with you, but I think it’s important for you to know (before you go too far criticizing Canada) that, when it comes to “nationality taxes” that the United States of American is the worst offender in the world today (and yesterday).


    • NervousInvestor September 13th, 2017 at 5:58 am

      Richardson is right.


  2. The Isaac Brock Society | Canada’s tax on being American! Why not! September 12th, 2017 at 10:00 pm

    […] is a link to the article, enjoy and if you can comment […]


  3. fno September 12th, 2017 at 11:55 pm

    Contrary to what Ms McCallum appears to claim, the taxes are not specifically based on nationality or targetted at Americans. The Greater Vancouver property-purchase tax is not paid by anyone who is a permanent resident, regardless of their nationality, and the City of Vancouver tax on unoccupied residental property (Empty homes tax) is applied to any homeowner who leaves it unoccupied for more than 6 months per year. The rule is the same whether the owner is Canadian, American, both or neither. It’s misleading to call these “Canada’s tax on being American”. Some cities with similar empty homes problems have introduced or are looking at empty homes taxes. London, Paris, San Francisco, Palo Alto and Sydney are just a few that come to mind. So please don’t look at this as an anti-American move by Canada. It’s not.


    • NervousInvestor September 13th, 2017 at 6:01 am

      Florida also did outstanding property tax for owner occupiers.


      • NervousInvestor September 13th, 2017 at 6:02 am

        Sorry. Did = Discounts


  4. Fred September 13th, 2017 at 3:45 am

    “Nationality-based taxes are among the worst kinds of protectionism.” This is so true. Were you to move to Canada, for instance, and move all your finances there, the US would still require you to file taxes, and would like to tax any capital gains on your condo if you sold it. This even though you would also be filing and paying in Canada. Truly, US citizenship is very sticky and pursues unsuspecting and unwilling souls everywhere, even when they owe nothing. It is high time we move to residency-based taxation. If you reside in Canada you should be treated as a local, and Uncle Sam should also let you go.


  5. Bruce Newman September 13th, 2017 at 4:07 am

    I think this argument is flawed in many ways. It is set up as a direct attack on United States citizens who purchase real estate in Canada when, in fact, Vancouver taxes “foreigners”, many of whom are Asians. It also hints that Trudeau and Canadians in general are not so lily white when, in fact, this is a City of Vancouver issue, period. Given the housing situation there, I can certainly understand that they want a healthy, vibrant city rather than having “foreigners” buy up all of the prime housing and have it sit empty. Nice try on the tax issue but it is a swing and a miss.


  6. Mike September 14th, 2017 at 5:09 am

    I do wonder if the author has Canadian bank accounts in order pay for the apartment and her life while in Canada?

    Has anyone mentioned FBAR to her yet?


  7. Yvonne Morris McCallum September 14th, 2017 at 7:00 am

    I respectfully disagree with the above comments. The empty home tax and foreign buyers tax are directed at foreigners like me. First, I am not a Canadian and therefore, Vancouver cannot be my primary residence. Second, Canadians don’t want to look at their own government immigration policies. Even your own immigration experts report that handing visas out like candy to the Chinese has fueled the housing boom in Vancouver and Toronto. In one year alone, the Canadian government handed out around 400,000 visas to Chinese nationals….invitations to come and live in Canada for six months of the year. We all love visitors, but these were not short term tourist visas. You guys have to decide if you want holiday makers or neighbors for half of the year.
    Sure, I’ll accept the tax when it is reciprocal. Over 1,000,000 Canadians head south each year to soak up the sunshine. I’ll pay up, when Canadians pay up.
    Plus, there’s the little issue of signing treaties and then violating them.


    • PierreD September 16th, 2017 at 7:14 pm

      With all due respect Ms. McCallum, you really have no clue what the above critique of your self-pitying article above means. The USA with it’s EVIL citizenship based taxation makes all of you who leave second class citizens wherever you go in the world. Just ask some of them who have tried, and I don’t mean the person who just took a 2-year assignment outside of your beloved country.
      You see, I made 2 (in retrospect) extremely stupid financial blunders in my life, even though I (until recently)consider myself quite financially savvy.
      The first was I married a US citizen then lived in the USA for about 3 years and left nearly 30 years ago (I guess it’s an OK place to live, but hardly anything so special as those who drink the homelander kool-aid are taught to believe). We very naively thought we were free to leave, but after the last Democrat regime, we discovered that my wife is chattel of the usa and still subject to taxation by that country under what appears to be some sort of modern day “runaway slave act.” Yes, your beloved usa thinks it has the right to tax the Canadian economy using the unfortunate beings who were born there. I’ll give you another hint. All of my Immigrant to Canada neighbours from other non-usa countries DO NOT have these issues. They are the truly free people.

      Second, I applied for and received a green card. WARNING TO OTHERS: NEVER DO THIS. If you plan on working in the usa, get some sort of visa, but NEVER get any immigration status there, lest you too become their chattel like my wife. With just a visa, you’ll be able to leave and have a normal life anywhere else, but not if you acquire the us taint.

      Also, in light of my wife’s unfortunate (again in retrospect) birth place, the usa wants to impart its citizenship unto our 2 children whether they want it or not. LIKE HELL they will accept this without a fight. This would entail them as well becoming taxation chattel of the usa. No thank you! Get lost!

      And, why do you choose to ignore the other stated facts that some other us jurisdictions are doing exactly what you’re complaining about? And your suggestion about taxing Canadians extra who own real estate there?? By all means go ahead….hit them HARD. There are numerous friendlier jurisdictions in the world with warm winters in the world. Do you think it will be Canada that is a net loser here?


  8. Haruo September 15th, 2017 at 10:44 pm

    “We all love visitors, but these were not short term tourist visas. You guys have to decide if you want holiday makers or neighbors for half of the year.”

    As a Lower Mainland resident (born and raised in Canada), I would like my government to slam the door on ALL “foreign ownership” of Canadian land. But unfortunately that isn’t going to happen.

    Meanwhile your country has decided to tax my wife to support all your indigent people despite the fact that she hasn’t set foot on US soil for the past 17 years. All because of “tax slavery”.

    BTW, conveniently, your country taxes Canadian Snowbirds for the property.


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