Nearly three years later, mayors in Kelowna and West Kelowna are still trying to opt out of B.C.’s speculation and vacancy tax.
The spec tax, implemented in early 2018, is an annual provincial tax paid by residential property owners in specific regions across B.C. It was designed to discourage speculative buyers — those who purchase a property only to sell it when the market increases — and people leaving properties vacant in urban centres.
The province raised $88 million in revenue from the tax in 2019 and officials are touting that 70 per cent came from foreign owners and satellite families. However, in Kelowna and West Kelowna — the only two Okanagan municipalities subject to the tax — the opposite seems to be the case, with a majority of revenue being collected from Canadians.
Kelowna Mayor Colin Basran and West Kelowna Mayor Gord Milsom, have long been vocal about their issues with the tax — and both have sent letters to Finance Minister Selina Robinson requesting exclusion from it. Both say it is disproportionately affecting Canadians, not the speculative buyers it targeted.
Basran’s letter to Robinson states this is in part due to the “unique nature of Kelowna’s strong tourism market.” Close to 60 per cent of the $2.7 million collected in Kelowna came from Canadian residents, compared to the provincial rate of around 12 per cent. In West Kelowna, that number is even higher with nearly 70 per cent of the $1.4 million total tax revenue coming from Canadians.
“This reflects our community’s strong appeal as an attractive destination within Canada, and should be considered when evaluating the ongoing implementation of the program,” Basran wrote.
And, the effect in Kelowna as far as affordable housing goes has been “negligible,” according to Basran. While the tax increased the rental supply by around 110 units of previously left-vacant properties, that amounts to just a 0.7 per cent increase in supply given Kelowna’s estimated 17,000 rental units.
Milsom said people being affected by the tax often own vacation homes or are looking to retire in the community in the future. A number of those individuals have been in the community for decades, he said.
“If they do that … and they don’t rent it out, they have to pay the tax,” Milsom told Black Press Media. “It’s completely unfair.”
The tax is also prompting would-be buyers to look elsewhere, said Milsom, as people are scared off by the threat of an additional tax. This makes surrounding areas such as Lake Country, Peachland and Westbank First Nation land more attractive options.
Of the more than $7 million that has come from the two cities since the tax’s implementation, the mayors say it’s still unclear how or if that money has been re-invested, despite provincial promises to help fund affordable housing in the communities it was collected from.
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