Photo: Nicholas Johansen / FILE
The province’s speculation and vacancy tax is not having the desired impact on cities in the central Okanagan
While newly appointed Treasury Secretary Selina Robinson announced the 2019 data released last week, Kelowna Mayor Colin Basran painted a very different picture in a letter to the minister to get feedback from affected communities.
When the controversial tax was introduced in 2018, the province said the intent was to pursue the non-residents who bought the houses but left them empty, encouraging them to put them on the rental market or pay the tax.
Robinson said last week the tax raised $ 88 million in 2019, of which 94 percent was from non-BC residents and 88 percent from non-Canadians.
She said this has contributed to a 16 percent increase in home starts and a seven percent increase in the vacancy rate.
In his letter, Basran said these numbers cannot be seen in the central Okanagan.
“In Kelowna, nearly 60 percent of its $ 2.74 million tax revenue was collected from Canadian residents. This reflects the strong appeal of our community as a top travel destination in Canada and should be considered when evaluating ongoing implementation of the program become.” Letter partially indicated.
The letter added that 70 percent of West Kelowna’s tax revenue came from Canadians.
On the housing market, Basran said the city’s two main goals, mitigating rising house prices and increasing rental supply, are not being meaningfully achieved in the city.
“In 2019, the real estate market hit new highs with an average single-family home price of $ 857,000 in December 2019.”
And based on the province’s vacancy conversion rate, says Basran, the local rental supply only rose “nominally 0.7 percent”.
Basran also questioned whether there is a direct correlation between SVT revenue accumulated in Kelowna and West Kelowna and the “direct reinvestment of that revenue in our community”.
“The lack of Kelowna-specific transparency between the SVT revenue collected and the SVT invested revenue makes it difficult to justify this additional tax as it affects our residents.”
Basran said the conclusions support the longstanding position of the Council that the tax does not meet the key objectives and results expected when it was introduced two years ago.
“In addition, the uneven regional implementation of the SVT continues to promote inequality and confusion. Accordingly, we call for Kelowna (and thus West Kelowna) to be excluded from the tax,” the letter concluded.
