Rather than making suggestions on how the province could tweak its new property speculation tax, Kelowna City Council wants the tax to be eliminated.
After the city council received a recommendation on Monday suggesting a number of ways the province could change the tax, the council sent the matter back for rewrite, primarily to state that the tax should be abolished altogether shall be.
A new motion was proposed to the council on Tuesday notifying the provincial government, the Opposition Green Party and the British Columbia Liberal Party that the City of Kelowna “is fundamentally against the introduction of a vacancy-based speculation tax in the City of Kelowna, as proposed in the 2018 budget. “
It also requested an on-site consultation to undertake an economic assessment of the possible unintended consequences of the proposed budget changes to property transfer tax, foreign buyers tax and speculative tax, and instructed the mayor to meet with the prime minister, finance minister and city council Minister for Affairs.
“We are confident that the government has heard concerns about the possible unintended consequences of the speculative tax and is ensuring that the right tools are used to address real speculation,” said Mayor Colin Basran.
He said while the city fully supports the province in solving the problem of homelessness and housing affordability, concerns about the city’s impact of the speculative tax do not detract from that support.
According to the city, the tax will have many unintended consequences that could harm the local economy.
“The impact can go beyond the local real estate market and affect the local economy as a whole, creating losses in business, entrepreneurial and commercial investments,” said Johannes Saufferer, manager, real estate services at Kelowna.
On Monday, Basran said he wanted the province to introduce a transaction-based tax on buyers who “flip” homes shortly after buying, as this would have a greater impact on stopping property prices from rising. Both the Union of BC Municipalities and West Kelowna – the only other interior BC municipality subject to speculative tax – have also called for a tax reversal.
In a press release on Wednesday, Basran said the province must act to alleviate the housing crisis in his city.
“We all agree that the status quo cannot continue,” he said. “Action is needed to improve the availability and affordability of housing for Kelowna residents. We also know it will take time to address the housing needs gap that has built up since the 1990s. “
The city says the federal and state governments have the tools and resources to significantly impact the availability and affordability of housing on both the demand and supply sides.
“Older levels of government should work with and consult with local governments before making changes that directly affect communities. Local governments play a limited role in processing land use and development permits. “
West Kelowna, which shares the same concerns as Kelowna, has already announced that it wants to be tax exempt.
Earlier this week, Kelowna City officials said the provincial expansion of the tax on foreign buyers and a luxury tax the province imposes on higher-priced properties will not have much of an impact on Kelowna.
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