The Kelowna Chamber of Commerce and the Greater Westside Board of Trade has written B.C.’s finance minister asking her to “step back” from implementing the controversial “speculation tax” on homes in Kelowna and West Kelowna owned by out of province residents.
The move comes in light of public outcry over the tax by local governments, businesses and individuals.
“We are writing this joint letter to you today on behalf of our close to 2,000 members representing more than 25,000 employees in the Central Okanagan, asking that your government step back from implementing the ‘speculation tax’ on homes in Kelowna and West Kelowna until the mechanics of how it would be implemented, to whom it will be applied, and how the tax is expected to make housing more attainable in our cities, is better defined and understood,” says the letter to Finance Minister Carole James.
“In the meantime, we encourage you to consult with community leaders, developers and construction trades officials in the cities and regions that have been specifically targeted for this proposed tax.”
In the letter, the chamber and board of trade offer to host a round-table discussion in Kelowna on the issue of the new tax.
Chamber president Tom Dyas told the Capital News Friday, the tax does not appear to have been well thought out and could lead to many unintended consequences that could hurt a number of areas of the local economy, including construction, other trades, tourism and small business.
It also comes at a time when some out-of-province property owners are getting ready to sell rather than see their taxes rise substantially on their property.
One woman from Alberta who contacted the Capital News, said she and her husband are currently in town listing their 1,400-square-foot condo on Benvoulin Road, a property they have owned for 10 years and have lived in on and off for nine years.
Glenda Batchelor said the couple is here so often they attend a local church, go to Kelowna Rockets games and even have library cards. She said they shop at local stores and when they are not using their two-bedroom condo, their children come out from Alberta to use it and all spend money here helping the local economy.
But she said the implementation of the speculation tax—$5 per $1,000 of assessed value this year and rising to $20 per $1,000 of assessed value next year—will push their total taxes up from $2,700 to $5,000.
“We just can’t afford it,” she said.
Batchelor said she and her husband were caught in a quandary of whether to wait it out to see if changes would be made to the tax and who it covers or sell now.
She said if no changes are made, she thinks there will be a glut of properties on the market and they could see the value of their property drop.
Not wanting to take that chance, she and her husband came to Kelowna this week to clear out the condo and list it with a realtor.
“We are just heartbroken,” said Batchelor.
And she’s not alone. She said among her circle of friends back in Edmonton, there are eight to 10 who also own properties here and they too are having to weigh the same decision.
Meanwhile, Dyas said a recent meeting of the chamber, board of trade, economic development commission, city officials from the four local municipalities in the Central Okanagan, the Urban Development Institute, the home building industry, MLAs and developers, resulted in a unified voice of opposition to the tax. Dyas said the wide-ranging damage the tax could do appears to have come from the fact the government did not consult before announcing it.
The tax only allies to Kelowna and West Kelowna in the B.C. Interior, as well as Metro Vancouver, the Fraser Valley and the Victoria and Nanaimo areas on Vancouver Island.
James has hinted tweaks could be made to the tax given the public, local government and an industry backlash. The tax affects both Canadians living outside B.C. and foreign owners. B.C. residents who own property that is not their principle residents are also subject to the tax but will get a tax credit to offset the impact said James in her recent budget speech.
Dyas said he his hopeful a change will be made, dubbing the tax “an anti-Canadian type of tariff.”
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