Update: March 1—2:55 p.m.
The City of West Kelowna wants to hear what the public thinks about the province’s new Speculation Tax.
In the recent B.C. budget, the province announced the new tax, effective this year, which targets foreign and domestic speculators in certain areas of B.C. including West Kelowna and Kelowna in the Interior.
A non-refundable income tax credit will be levied on non-owner occupied, vacant and short-term rental properties in West Kelowna, Kelowna, Metro Vancouver, the Fraser Valley, and the Capital and Nanaimo Regional Districts on Vancouver Island that are owned by individuals who do not live in BC.
West Kelowna council will receive a report on tax at its March 13 meeting and city staff are requesting residents and non-residents submit their opinions by 9:30 a.m. March 13 in order to be included in the report to council.
Send comments to email@example.com.
For more information on the Speculation Tax, go to gov.bc.ca and search “Speculation Tax.”
West Kelowna and Kelowna are both worried about the effect the province’s new speculation tax will have not only on their housing markets but also their local economies.
And at least one West Kelowna city councillor had choice words for B.C. Finance Minster Carole James when the issue came up at Tuesday night’s council meting.
“We were blindsided by this,” said Councillor Rick De Jong. “We found out about this with the general public when it was announced by the finance minister (in this week’s provincial budget). It’s disgusting.”
And he added sarcastically “Well done Carole James.”
Several other councillors voiced their concern, describing the tax as being very bad for the city. James said the new tax will only be applicable in the Metro Vancouver, the Fraser Valley, the Capital and Nanaimo Regional Districts on Vancouver Island and the cities of Kelowna and West Kelowna in the Interior
“It’s a total market distortion,” said Coun. Rusty Ensign. “It’s unfair.”
Meanwhile, Kelowna’s mayor, Colin Basran, said he’s concerned about what he called the “unintended negative consequences” the tax could create in his city.
“Investment from other parts of the country is a good thing,” said Basran, adding it helps stimulate the economy through development, tourism, job creation and helps small business. But that could all be impacted by the implementation of the new tax here.
Both Basran and his West Kelowna counterpart Doug Findlater questioned why other Central Okanagan municipalities were not included, such as Lake Country, one fastest growing municipalities in the province and the one with the highest house prices in the area.
“Why were Kelowna and West Kelowna singled out?” asked Basran.
The new tax imposes a $5 levy for every $1,000 of assessed value this year and will rise to $20 per $1,000 of assessed value in 2019. It targets what the province calls foreign and domestic “speculators” but could catch Canadians from other provinces who own homes here, either vacation property or homes they intend to retire to in the future.
Long-term rentals, even if owned by out-of-province residents, are not affected by the tax.
West Kelowna Coun. Carol Zanon questioned if the tax was even constitutional, saying mobility rights are guaranteed in the Canadian Charter of Rights and Freedoms and to her, the tax appears to limit that.
Coun. Duane Ophus and Bryden Winsby agreed with their colleagues that the tax is bad news for West Kelowna, with Winsby saying the city needs to get serious with its reaction to the province’s move. He moved a motion—supported unanimously by council—that a report be prepared immediately by the city on the impact of the tax to West Kelowna.
City chief administrative officer Jim Zaffino said he will have that report in council’s hands next week. Basran said Kelowna city staff are also preparing a report on the potential impact of the tax on the city.
In the meantime, Findlater said West Kelowna will raise its concerns at the upcoming Southern Interior Local Government Association convention.
Kelowna will look at “tweaks” and alternatives that can be used to achieve the same goals—making housing more affordable for mid- and low-income earners—said Basran.