FEATURE FRIDAY: Some have high hopes for the speculation tax

“Homes should be for people…”

Christine Mettler wasn’t surprised when Kelowna’s business community started to lobby against the speculation tax.

Whenever there’s a plan that cuts into the bottom line of B.C.’s wealthiest, she said, the fear mongering begins.

“When we talked about how we need a higher minimum wage, we heard the catastrophizing about how it hurt jobs and the economy despite studies that show how economic activity increases when it comes up,” said Mettler, an Okanagan poverty reduction co-ordinator

“Now it’s this.”

The speculation tax, set to be applied this year, has set off a lot of theorizing about how it could crash the real estate market by putting too much financial pressure on a select group.

READ MORE: STILL OPPOSED TO THE TAX

B.C. residents who are subject to the tax will pay a rate of 0.5 per cent more property tax; Canadians from outside B.C. who have properties in the province that are subject to the tax will pay a one per cent tax rate, while non-Canadians will continue to pay the previously-announced two per cent rate.

B.C. residents with a vacant second home will be eligible for a non-refundable tax credit that will be applied against the speculation tax. The credit will offset a total of $2,000 in speculation tax payable. This means they will not pay tax on a second home valued up to $400,000.

Owners are also exempt if their property is rented out long-term—this is defined as being rented out for at least six months of the year.

All these changes, estimates the province, could bring in $200 million of yearly tax revenue starting next year and slow what’s been considered an over-heated market.

Mettler said the need to do something to temper the real estate market has long been here and the levy could get to the heart of what has been hurting a great number of Okanagan residents.

READ MORE: WEST KELOWNA WANTS TAX GONE

Right now Kelowna’s vacancy rental rate is, alongside Abbotsford, the lowest in the country—sitting at 0.2 per cent. When housing of three bedrooms or more is factored in, it’s even lower.

Contrast those figures against the vacant housing supply in this area. In the 2016 Census, Statistics Canada reported that 25 per cent of downtown Kelowna homes sit vacant or are not used as a primary residences. The figure for the Lower Mission was pegged at 17 per cent.

“We have a huge problem where people don’t have access to rental stock and there are houses sitting vacant,” said Mettler.

“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.”

That’s something she said she’d like local politicians to take a closer look at, as it’s what the majority of their constituents actually struggle with.

The focus, however, has been on market concerns. Local MLAs have raised their concerns for the economy and the mayors of Kelowna and West Kelowna—the only two speculation tax affected markets in the Okanagan—have said they are against the tax, both in its original and revised form for how it could negatively affect property values.

West Kelowna Mayor Doug Findlater met with finance minister Carole James last week, and presented a number of proposals including exempting West Kelowna from the tax.

He argued West Kelowna is unique given it is only 10-years-old and does not have reserves built up to fund important infrastructure upgrades, projects that currently rely heavily on development cost charges—revenue raised from development to pay for public infrastructure. He’s also of the belief that the tax will create an uneven playing field with neighbouring communities that are not impacted by the tax.

Cindy Raftis, an Albertan who owns a second home in Kelowna for over 15 years, said her family spends about 40 per cent of their time in Kelowna and contributes greatly to the economy. The levy, as it was originally pitched, could have put an extra $50,000 cost on top of the property taxes her family already pays and that is definitely causing her to reconsider her life in one of the two affected communities.

“If this tax goes through as proposed, we will consider selling, however, we won’t be alone—we expect that many homes will be put up for sale, thus reducing property values throughout Kelowna,” she said.

“The NDP government has stated that the tax may be avoided by people making their second homes available for long-term rental. Realistically, this makes no sense for people like us who occupy their homes for a good portion of the year. And, we don’t believe that government should put people in a position that forces them to rent out their homes in order to avoid a huge tax.”

If it could make the market more equitable, Mettler doesn’t see the harm.

Through her work with the BC poverty prevention coalition, she’s recently seen the results of a survey given to local residents who face poverty.

“Some of their answers are heartbreaking,” she said.

“I’ve read, ‘I had to move into a shelter because I can’t afford rent anymore’ and ‘I’ve worked my whole life. Now I live in a shelter,’” she said. “So, sorry to the people who have to pay more money, but the people who own two or more houses are not more important than people who need primary residences.”

Just Posted

Casa Loma residents petition to halt proposed Blackmun Bay project

West Kelowna City Council grants second reading for what would be the city’s largest development

Lakestone Grand Opening set for this weekend in Lake Country

MP Stephen Fuhr, MLA Norm Letnick and Mayor James Baker will all speak at the event

West Kelowna RCMP search witnesses in assault

A man was attacked in the early morning on July 16

Small business spotlight: Kelowna’s master tailor

Sam Galvez started his business in Kelowna 6 years ago

Kelowna ranks fifth in where Canadians will move to buy a home: study

‘The study suggests that the dream of homeownership is very much alive and well,’ said Finder’s editor

VIDEO: B.C. MLA Michelle Stilwell takes first steps in nearly 30 years

‘It actually felt like walking. It’s been 27 years… but it felt realistic to me’

Dog recovering after being drenched in hot coffee, B.C. man charged

Man was taken into custody, charged, and released pending a court date

Taekwondo instructor, 21, identified as B.C. bat rabies victim

Nick Major, 21, an instructor at Cascadia Martial Arts in Parksville

Science expedition to Canada’s largest underwater volcano departs Vancouver Island

Crews prepared for a two-week research mission to the Explorer Seamount

Summerland clinic will be closed on August long weekend

Medical office assistant needed at Rosedale Medical Clinic

Driver who killed Shuswap motorcyclist receives absolute discharge

Chase family speechless following decision by BC Review Board

B.C. shipyard to get one-third of $1.5 billion frigate-repair contract

The federal government has promised to invest $7.5 billion to maintain the 12 frigates

Anglican Church to review governance structure after same-sex marriage change fails

Some say the current system to change doctrine gives too much voting power to a smaller class of bishops

B.C. adding fast-charge stations for electric highway trips

Okanagan, Vancouver Island, Kootenay stations ready for use

Most Read