Vancouver fights back in tax battle over US$20 million property linked to Chinese billionaire NPC member Zheng Jianjiang
- Enforcement of a US$190,000 vacancy tax bill on a home owned by the wife of air-conditioning tycoon Zheng Jianjiang is ‘reasonable and correct’, the city says
- The home, since demolished, was uninhabitable and filled with ‘large amounts of human/animal faeces’, says the owner’s lawsuit against the tax bill
Vancouver’s municipal authorities are fighting back in court to collect a massive tax bill on a C$26.8 million (US$20.4 million) property linked to the Chinese billionaire parliamentarian Zheng Jianjiang.
The seaside property, owned by Zheng’s wife, He Yiju, is on Belmont Avenue, one of Canada’s most expensive streets. It was hit with the vacancy tax bill of C$249,313.67 (roughly US$190,000) in 2017, representing 1 per cent of the property’s value at the time.
The house on the site was demolished in recent months, to make way for a planned 31,393 sq ft home.
But in 2017, when the city declared the previous home vacant and subject to the tax, it was already “uninhabitable” and contaminated by asbestos, mould and “large amounts of human/animal faeces”, according to a private hazard report filed in support of a lawsuit by He seeking to quash the tax bill.
The British Columbia Supreme Court petition, filed on June 18, says that building and demolition permits were sought in April 2017, but were not issued until February 11 this year, through no fault of He’s.
But in a July 15 response to the petition, the City of Vancouver says He failed to make a declaration about the property’s status by the February 2, 2018, deadline for the 2017 tax year.
He Yiju had owned the home since 2015, said a vacancy tax review panel, whose report was included with an affidavit lodged by the city.
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In the review request, which was unsigned in the affidavit, the owner’s representative had described the 4,738 square foot home as a “cottage”, which had “rotted and collapsed”.
The panel said it had been told by the city’s Chief Building Official’s office that the home had been “boarded up from at least 2009”.
Although the review panel appeared to acknowledge that the home was not, in fact, inhabitable, it still sided with the city, and rejected He’s appeal against the tax.
“The Review Office has taken all information provided into consideration including that the owner purchased this property in October 2015 when it was already in an uninhabitable state and did not submit any application for development permits until April 2017,” the panel wrote.
The panel’s decision was “both reasonable and correct”, the city’s response to the lawsuit says.
He’s lawyer, Joel Nitikman, declined the South China Morning Post’s request to speak with him or his client about the case.
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Vancouver’s annual 1 per cent vacant-home tax was enacted in November 2016, to apply from 2017, to address a shortage of rental accommodation, and to fund affordable housing. Several measures have been introduced in recent years to mitigate Vancouver’s status as one of the world’s most unaffordable cities, including a provincial foreign buyers’ tax and a speculation tax.
Zheng, 58, president of AUX Group and chairman of Ningbo Sanxing Medical Electric, is a former mechanic who made his fortune building air conditioners.
The China-focused Hurun wealth report for 2018 listed Zheng and He with combined wealth of US$1.2 billion. Forbes said Zheng and his family were worth US$1.3 billion in March 2018, but said that had fallen to US$925 million by mid-October. Wealth analyst Wealth-X says Zheng is worth US$2.5 billion.
Zheng has also been a deputy in the National People’s Congress, China’s rubber-stamp legislature, since 2013, representing Zhejiang province.
An email giving a C$5 million (US$3.8 million) quote for landscaping the 0.48 hectare (1.2 acres) Belmont Avenue lot was included in an affidavit supporting He’s petition.
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It was addressed directly to Zheng by landscaper Paul Sangha, who told him “[it] was a pleasure to meet you and I look forward to an opportunity to work with you on developing a garden for your residence”.
The previous home on the Belmont Avenue site was deemed to be worth only C$10,000 (US$7,600), in the property’s official 2018 valuation of C$26,789,000 (US$20,403,000). The eight homes on He’s block alone are worth a combined C$290 million (US$221 million).
