Kelowna Mayor Colin Basran speaks to reporters outside Kelowna City Hall earlier this year after the province tweaked its planned speculation tax. —Image: Alistair Waters/Capital News

Despite legislation to introduce it, Kelowna plans to keep up call to scrap speculation tax

City says it will keep working with other municipalities affected by the tax

The City of Kelowna says it plans to continue its fight against the B.C. government’s speculation tax, despite legislation being introduced earlier this week to bring in the tax.

The city says it still will work with other municipalities—such as West Kelowna, the only other Interior municipality affected—to demonstrate how the tax will not meet the provincial government’s stated objective of making more affordable housing units available to Kelowna residents.

The proposed tax ranges from 0.5 per cent on secondary homes left vacant by B.C. residents, to two per cent on foreign-owned properties.

Kelowna and West Kelowna have made their concerns well known to Premier John Horgan and Finance Minister Carole James ever since the tax was proposed in March but their protests have fallen on deaf ears.

Those concerns include the potential for unintended consequences on their local economies and the proposed legislation’s lack of actual impact on housing speculation. The city is also concerned the tax is not equitable due to its limited geographic nature – true speculators can simply purchase in neighbouring communities that are not impacted by the legislation.

RELATED: Battle resumes over speculation tax on B.C. vacant homes

The tax is only slated for the Lower Mainland, the Fraser Valley, the Greater Victoria and Nanaimo areas,Kelonwa and West Kelowna.

“The Union of B.C. Municipalities’ report, A Home for Everyone, provides well-researched, data-based recommendations to manage actual speculative housing activity, rather than simply taxing homes that are vacant or used occasionally,” said the city’s director of strategic investment Johannes Saufferer.

The introduction of the tax bill prompted an immediate demand from the Opposition to scrap the tax.

B.C. Liberal leader Andrew Wilkinson referred to mayors who objected to the tax at the recent Union of B.C. Municipalities convention, calling it a “fake” tax that has targeted mostly B.C. residents and caused new housing developments to be cancelled.

James has stressed that people can avoid the tax by renting out their second residence for half the year or more.

RELATED: Mayors call for changes to speculation tax

B.C. Green Party leader Andrew Weaver was among the critics who had some rural areas on Vancouver Island and the Gulf Islands removed from the tax area. He said earlier this week he is still concerned that the tax may land on property owners who are not speculators.

“I have been raising numerous examples of homeowners who are not speculators who are being unfairly impacted by this tax, and I will be looking to see whether government has addressed these concerns,” Weaver said after the legislation was presented in the B.C. Legislature.

“In addition, I have raised concerns about the impact of this tax on land under development and its implementation in stratas with no-rental clauses.”

The City of Kelowna, while still opposed to the tax, says if it foes ahead as planned, some of the new revenue generated by it should remain in the community to deal with the municipal impacts associated with housing affordability and homelessness.

The city says it supports many of the efforts the government is making to address homelessness and housing affordability, such as the addition of 114,000 rental units across B.C. over the next 10 years. Eight-eight units of supportive housing are currently under construction in the city and another 100 are expected by 2019.

“But we need to use good data to guide policy development and decision making. In the case of any new tax policy, we support a full economic analysis prior to implementation,” said Saufferer.

(With files from Black Press Victoria correspondent Tom Fletcher.)

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