The city of Kelowna said Wednesday that it will continue to work with other communities to crack down on the speculative tax proposed by the provincial government.
According to the provincial government, the speculative tax is designed to “prevent speculation about housing and help turn vacant and underused properties into apartments for people who live and work in British Columbia. The tax is part of the government’s 30-point plan to tackle the housing crisis and make life more affordable for people.
“This annual tax is paid by homeowners in designated taxable areas of BC. It is estimated that more than 99 percent of British Columbians are tax exempt.”
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Community leaders are putting pressure on the provincial government to change the speculation tax
The proposed tax only applies to properties in various regions of the Lower Mainland and Vancouver Island, as well as Kelowna and West Kelowna.
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“Kelowna has made its concerns known to the Prime Minister and Treasury Secretary since the tax was proposed in March,” the city said in a press release. “These concerns include the potential for unintended consequences for the local economy and the real impact of the proposed legislation on property speculation. The city is also concerned that the tax is not fair due to its limited geographic nature – real speculators can simply shop in neighboring communities that are not affected by the legislation. “
The proposed tax ranges from 0.5 percent on second homes left blank by BC residents to 2 percent on foreign-owned properties.
However, if the tax becomes a reality, the city believes that some of the revenue generated should stay in the community to help manage the community impact of housing affordability and homelessness.
“However, we need to use good data to guide policy development and decision making. In the case of a new tax policy, we support a full economic analysis prior to implementation, ”said Johannes Saufferer, Real Estate Services Manager for the City of Kelowna.
CLOCK DOWN: The NDP introduced the speculative tax to help create more accessible rental units. However, there is growing concern that doing so could have the opposite effect.
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The aim is to make rental housing easier to access, but some say the speculation tax could have the opposite effect in already tight markets like Kelowna
The aim is to facilitate access to rental housing, but some say the speculative tax could have the opposite effect in already tight markets like Kelowna – June 8, 2018
The Okanagain Mainline Real Estate Board also targeted the proposed tax.
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“I haven’t met anyone who doesn’t think we need more affordable housing, but the suggestion that this tax, as proposed, would somehow improve the situation is misleading to say the least,” said OMREB President Marv Beer.
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Beer contends that the proposed tax does not target the speculator, who is defined as someone who buys and “flips” property for profit within a relatively short timeframe.
“Speculators would only be minimally affected by this tax because they did not own a property for long. Instead, it would be the longtime homeowner who would pay year after year to spend time and money in BC, ”he said.
“Ironically, it is possible that the tax is encouraging speculators to target homes under $ 400,000 and compete with legitimate buyers for cheaper homes. If the government really wanted to find speculators, it could impose a levy on homes that were sold within a short time of purchase. “
Beer also questioned the government’s claim that the proposed tax will target foreigners and those from other provinces who do not pay income tax here. Beer said the minister responsible for this tax in lawmakers announced that nearly two-thirds of those who would pay the tax would be British Columbians, about 20,000 out of 32,000 households.
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“The good news is that the government has introduced a number of tax exemptions. The bad news is that the myriad of exemptions would create a costly administrative nightmare and would neither improve housing affordability nor deter speculators. While action may be needed to address both of these issues, this tax, as currently proposed, is not the answer. “
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