Costa Rica story sparks threat of lawsuit

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This article was published 12/04/2018 (2464 days ago), so information in it may no longer be current.

Premier Brian Pallister is refusing to answer questions regarding taxation issues about his Costa Rican property and threatening to sue the Free Press for its coverage of the story.

Last week, the premier said he “probably should have dug deeper” into whether a company he owns owes payment of a luxury tax on his Central American vacation home. At the time, in comments widely reported, Pallister promised to look into the matter.

However, despite further requests, Pallister has not said whether his company owes the luxury tax or whether he has paid it. Instead, he has refused to discuss the matter and has threatened the Free Press with legal action unless the paper apologizes for its story, which reported on the Costa Rican luxury tax and the vacation home he and his wife Esther own through a holding company.

“These articles by their ordinary meaning of the words contained or the innuendos of same, create the impression that Premier Pallister flouted the law of Costa Rica, ignored tax obligations and did not make tax payments that were due and owing,” Palllister’s lawyer Robert Tapper said in a formal notice under the Defamation Act delivered to the Free Press Friday.

“The article was designed by the Winnipeg Free Press to impugn the integrity of Premier Pallister and to bring his reputation into disregard, odium and hatred.”

Putting the Free Press on notice is required by law before any defamation suit can be filed. In order to avoid any legal action, Tapper made a number of demands from the Free Press, including a front-page apology and a requirement the newspaper reveal its source for the story. Costa Rica’s national luxury tax on homes was instituted a decade ago. Its purpose is to tax the wealthy to improve housing for the poor. Pallister and his wife Esther own a 7,700-square-foot vacation home on seven acres of land near Tamarindo on Costa Rica’s Pacific Coast through their holding company, Finca Deneter Doce S.A.

The construction value of the home determines whether one is liable for the tax. Building permits Pallister’s company took out in 2008 and 2009 suggest Finca Deneter met the means test for the tax. Once it is determined that a person or company must pay the tax, the actual amount owed is based on the market value of the home and of the land on which it sits. Tamarindo-area real estate agents estimate the value of Pallister’s home at anywhere from US$550,000 to more than $1 million.

After the Free Press repeatedly asked for an update regarding questions the premier himself had acknowledged surrounding the luxury tax, Pallister’s office released the following statement to the paper on Friday: “Premier and Mrs. Pallister have paid every tax bill they have ever received in respect of their home in Costa Rica. They have never received any other tax notices regarding their home. If the Free Press can produce any unpaid tax bills, or credible proof that any taxes are unpaid, that information should be produced now. We have requested a retraction and apology on the Free Press’ misleading and factually incorrect story. We won’t be commenting to the Free Press on the story in the interim.’’

However, Pallister’s statement does not say whether his company owes the tax or whether it has been paid. Costa Rican residents don’t receive a bill for the luxury tax — although the government may put individuals or corporations on notice that they must file. Homeowners who meet the threshold for the tax must proactively determine the amount they owe and pay it.

“The Free Press has raised an issue about whether Mr. Pallister’s company has paid taxes it owes on its Costa Rican property. Mr. Pallister has not given Manitobans a clear answer. We believe they are entitled to one regardless of the legal threat,” Free Press editor Paul Samyn said.

larry.kusch@freepress.mb.ca