Chinese Billionaire Fined $200,000 For Not Living In $20 Million Mansion

Flag_of_Vancouver_(Canada).svgThere is a bizarre case in English Bar Beach in Vancouver, British Columbia where the wife of a Chinese multimillionaire is suing the government over a $200,000 tax bill for leaving her $20.4 million mansion empty. There were a couple of notable facts in the story that attracted my attention. First, this is a uniquely stupid law that fines you for not living in your own home.  Second, this home is owned by He Yiju and her husband Zheng Jianjiang, a top politician in China’s National People’s Congress. That’s right.  This is a humble dwelling of a dedicated Communist public official.

The home was purchased in 2015.  However, Vancouver’s Empty Homes Tax requires owners of unoccupied homes to pay a 1% levy on their properties’ values.  The purpose was to force turnover in the city’s housing stock, which is skyrocketing  in value.  Putting aside that the family insists that the home is not vacant, the law denies basic notions of owning property in fee simple.  If I want to own a home and leave it for much of the year, I fail to see the right of a city to fine me for the use or lack of use of my own property.

As for the family, this appears another example of the “Red Aristocracy,” Communists living for the spoils of a corrupt, authoritarian regime.  Chinese billionaire and parliamentarian Zheng Jianjiang helps oversee a body that helps shield the authoritarian policies of the Chinese regime in repressing millions.  He then gets to run off to his mansion on “Billionaire’s Row” in Vancouver. Their family had a combined net worth of $925 million in October 2018, according to Forbes.  I understand how irritating it is to have unoccupied homes in tight markets. Huawei executive Meng Wanzhou, for example, reportedly owns two homes in Vancouver worth $4.2 million and $12.2 million. Thus, I have little sympathy for the owners but the law still strikes me as fundamentally wrong with basic notions of ownership.

What do you think?

17 thoughts on “Chinese Billionaire Fined $200,000 For Not Living In $20 Million Mansion”

  1. Professor, I have reached a reluctant peace with property taxes, they allow local government to keep up the roads and pay civil servants such as police, firefighters, and other people who make life in cities possible.

    But Vancouver’s Empty Homes Tax is levied in addition to property taxes. It’s not a millage which provides specific services, but a stick to beat land owners to force them to become landlords or sell their property to others who presumably to live.on it. It’s the quintessence of governmental coercion.

    Vancouverites and Chinese citizens who enjoy that city’s Asian-friendly business and shopping opportunities but wish not to be punished for investing in property without either living in it or renting it to others can, however, vote with their feet.

    Part of the Canadian experience in general is coercive legislation of one kind or another which most Americans aren’t familiar with. Socialized medicine beats the price of prescription drugs down far below what Americans pay, but fewer Americans wait in pain or poor health for medical care or have trouble finding a primary care physician whose practice is accepting patients.

    While finding a place to live you have to consider all its attractions and drawbacks. I live in a state which allows open carry of firearms and two tiers of permits to carry concealed weapons, one of which only requires you to pay for the computerized records check to affirm you’re not certified to be insane or a convicted felon, but prone to enact laws which defy political correctness (some of which are libertarian, some unduly coercive). My wife and I find this place congenial.

    So, the Chinese who made a fortune in politics don’t get my sympathy. Vancouver is in many ways a socialist paradise financed by taxes on its rich resources and the many people who find it congenial. High officials in a repressive socialist state ought to expect to obey the same laws and pay the same taxes as everyone else in their position, whereever they live. No one, after all, is forcing them to own property in Vancouver. I’d say that a high Chinese government official investing many millions of (possibly ill-gotten) dollars in Canadian real estate shows a real lack of confidence in his own government.

  2. Banana republics seem all the rage these days. How long before Canada and yes, the United States just nationalizes the housing market?

    “We won’t allow our assets to be expropriated,” Deutsche Wohnen Chief Executive Officer Michael Zahn said during a panel discussion in Berlin this week. “That’s just not going to happen. We’re not living in a banana republic.”
    https://www.bloomberg.com/news/articles/2019-04-13/berlin-housing-backlash-spurs-drive-to-nationalize-real-estate

  3. EMPTY HOMES TAX IS PERFECTLY JUSTIFIED

    Professor Turley notes that Vancouver, like most vital cities, suffers from housing shortages:

    “The home was purchased in 2015. However, Vancouver’s Empty Homes Tax requires owners of unoccupied homes to pay a 1% levy on their properties’ values. The purpose was to force turnover in the city’s housing stock, which is skyrocketing in value”.

    It sounds like Vancouver wants to avoid an inventory of spacious-but-empty houses. Yet Professor Turley feels this policy is “fundamentally wrong” and clashes with “basic notions of ownership”.

    But one could argue that cities have a strong interest in discouraging non-resident billionaires from owning huge homes that stand unoccupied. This issue has become a genuine problem in many world class cities. Apparently world-class billionaires like to purchase extraneous mansions and condominiums they have no intention of living in.

    It is estimated that London England has up to 60,000 properties standing empty amid a critical housing shortage. Those properties include 740 so-called ‘ghost mansions’. One can Google the subject and find many articles describing this odd phenomenon. Some of London’s richest neighborhoods are dead-zones at night with mostly dark townhouses. Surely one can argue that cities have an interest in discouraging such trends.

    The U.S. Census Bureau estimates that an astounding 247,000 apartments in New York City stand empty most of the year. This figure represents more than 11% of the city’s housing stock. Again one can Google this subject and find several articles. Surely New York City, notorious for its lack of affordable housing, has a strong interest in discouraging this trend.

    To suggest that cities have no right to impose non-use taxes is nothing more than rigid Libertarianism regardless of public interest. World-class cities have no obligation to accommodate world-class billionaires who rarely ever visit.

      1. or they could get rid of rent control and then landlords would have more incentive to lease them out.

        crazy idea and rich socialists don’t like such things very much

        why is it the tony locations with all the rich people end up with more socialist-like laws that only seem to benefit those who already have the money at the expense of the middle? i can’t figure that out but I’m trying

        1. Kurtz, as I noted cities have no obligation to pander to foreign billionaires that are rarely present. I’m sure Chicago has a huge number of empty condos. Someone in family owns a gorgeous condo on the Near North Side that has sat empty for most of the last 10 years.

            1. During the years I lived in Chicago my rent went up 15% annually. Unfortunately my income was ‘not’ keeping pace.

  4. Vancouver has a massive Chinese migrant community. It’s a great place for the Chicoms to buy a house. Finding a relative to inhabit should not usually be that difficult. Chinese keep closer tabs with their cousins that we do. Better yet, they can rent, and generate cash income that’s deposited into stateside bank accounts. That’s much easier than trying to sneak it out in junkets to Hong Kong and Macau!

    Chinese Communist party includes not just officials but a lot of regular private businessman now too, just successful ones however. You have to bring something to the table to make the cut. It’s an exclusive club. Much as I dislike communism as a political ideology, it would be wrong to suggest that every CPC member is corrupt or in some way a bad guy. I would not even say that about Democrats! LOL. A lot them are decent normal people, who are doing business the only way it can be done there successfully.

    Is it true that Peace arch park in Canada encompasses an unregulated border passage between Canada and US that can be transited on foot outside the view of border patrol? How convenient!

    Don’t worry I’m not giving anythign away. Shitou human smugglers already know this. It’s Americans who are clueless about our weak borders, more so than foreigners.

  5. Perhaps it’s time to change our laws respecting non-occupied dwellings in tight markets like New York and Vancouver. Part of the reason real estate values have risen so dramatically in Vancouver is that the effective property tax rate in that beautiful city is less than 1% of true value. In New Jersey, where I live, the effective tax rate is more than 3% of true value. The differential in rates is baked into the prices asked by sellers and paid by buyers.

  6. I’d like to know more details of how the law works before reaching any conclusions. For example, does the government pay you money instead of you paying them money if you let your mother in law or ex spouse stay in your home?

  7. There are few “communists” in China or the world. China is a monopoly capitalist country with oligarchs ruling the roost.

  8. NFL Phil Simms has put his expansive Franklin Lakes mansion on the market again. At a reduced price for $5.3 million.

    The 10,180-square-foot home features 7 bedrooms and 9 bathrooms, including two half-baths and 19.5 acres.

    The listing describes the place as a “wonderful opportunity to vacation at home in a one-of-a-kind setting.”

    Check out the photos.

    https://www.realtor.com/news/celebrity-real-estate/phil-simms-cuts-price-new-jersey-mansion/

  9. First, this is a uniquely stupid law that fines you….I fail to see the right of a city to fine me for….

    In our country CMS (Centers for Medicare and Medicaid) imposes regulations and penalty fees to physicians, hospitals and clinics for failing to follow their inefficient and repulsive rules, while patients wildly waive their Medicare and Medicaid cards like a defiant sword. Its a saprophytic, co-dependent, arrangement as the medical industry collapses because of CMS rules.

    https://www.cms.gov/Regulations-and-Guidance/Regulations-and-Guidance.html

  10. How many units in Trump Tower are unoccupied? How much Russian laundered money is tied up in vacant properties i. The US, skewing property values?

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