It’s time for our annual year in review. Over the next few weeks, we will be recapping the year that was and discussing the stories that impacted the region most. If you know a story from 2018 that you think was particularly impactful, please email email@example.com and we will add it to the roster of reader-generated Most Important Stories of 2018.
Our No. 10 story is the speculation tax because, let’s face it, you would be hard-pressed to find someone who didn’t have something to say about both its merits and its potentially negative consequences in the year that passed.
There aren’t many words that rile up people who have a vested interest in the local real estate market more than “speculation tax.”
The controversial tax created a lot of frustration when it was announced and it’s not bound to go away any times soon, with the market already shifting in its wake.
Elton Ash, the regional executive vice president of RE/MAX of Western Canada, won’t even call it by its name.
“I call it the so-called speculation tax because it’s really a vacancy tax,” he said.
“It’s about taxing people who have second properties in Kelowna and West Kelowna and it’s illogical and ludicrous.”
Already, he said this week, it’s creating a slow-down in the market, and it won’t even be implemented until next year.
“We kind of saw it already when it was proposed in the summer …Alberta buyers started standing on the sidelines when it came to buying a second property in Kelowna and West Kelowna,” he said.
“Come the spring of 2019, we know we will see properties come on the market from owners who now own second properties.”
It’s a shame, he said, because many of the people who own homes in these cities had planned to live there in their retirement and contribute to the local economy.
The local economy is exactly what mayors of impacted cities are concerned with.
With the levy being applied to West Kelowna and Kelowna alone and created concerns about dwindling development revenues — in its wake, both cities have lobbied against it.
“We have been fighting the ignorance in Victoria and opposing this tax and (we are going) to see another uproar as people get taxed for this,” said former Mayor and current West Kelowna councillor Doug Findalter, said this week.
Findlater argues the new tax is scaring off new development and costing West Kelowna revenue from new construction and development cost charges, which West Kelowna uses to pay for some infrastructure.
The city has estimated if the new provincial speculation tax has the impact predicted, it could mean future annual residential property tax increases could jump into the five per cent range from the current two per cent range.
Kelowna mayor Colin Basran has repeatedly called for a full economic analysis of the speculation tax and for using “good data before pushing through policy.”
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While some are concerned, others have supported the change.
“We have a huge problem where people don’t have access to rental stock and there are houses sitting vacant,” Christine Mettler, an Okanagan poverty reduction co-ordinator, told the Capital News.
“This may encourage people to return to their homes or put them on the market and that’s fine. We have a serious availability and affordability crisis…The housing market has turned into a tool people derive profit from at the expense of people who just want a place to live—homes should be for people.”
Only time will tell what will really happen.