Speculation tax changes fall short for West Kelowna
NDP lowers controversial tax on Canadians who don’t live in B.C., but West Kelowna still wants an exemption
Doug Findlater may be going back to Victoria.
The mayor of West Kelowna says he’s prepared to try to meet again with Finance Minister Carole James to plead for his city to be exempted from the speculation tax.
“I’m quite prepared to go back at them on this,” Findlater said Monday.
“It’s a pretty important issue for us because new development is how we help fund our infrastructure improvements,” he said. “If new construction is discouraged by this tax, and we’re certainly hearing it will be, that is going to hit our budget and infrastructure plans pretty hard.”
In announcing revisions to the speculation tax on Monday, James said the tax would apply to properties in Metro Vancouver, Kelowna, West Kelowna, Nanaimo-Lantzville, Abbotsford, Chilliwack, Mission and the Capital Regional District around Victoria on southern Vancouver Island, excluding the Gulf Islands and Juan de Fuca.
The speculation tax is intended to improve housing affordability in areas where the need is most acute, while exempting rural cabins and vacation homes, James said.
The changes are due to be introduced in legislation this fall.
“Over 99 per cent of British Columbians will not pay the tax,” said James. “Only those who hold multiple properties and leave them empty in our province’s major cities will be asked to contribute.”
In 2018, the rate for all properties subject to the tax would be set at 0.5 per cent of a property’s assessed value, regardless of whether the owner is foreign, Canadian or from B.C.
Starting in 2019, the tax rate would be set at two per cent for foreign investors and extended family members.
For Canadian citizens and permanent residents who do not live in British Columbia, the tax rate would rise to one per cent of a property’s assessed value next year.
B.C. residents with second properties are also eligible for tax credits valued up to $400,000, said James. The tax credit is meant to offset the tax of $2,000 on a property valued under $400,000.
James said people who rent out their second property for at least six months of the year will not have to pay the speculation tax.
James said the government estimates the tax will generate about $200 million in revenue next year.
Findlater met with James last week to specifically ask for West Kelowna to be exempted from the tax.
“For us, these changes are not good news. It’s very unhappy news that West Kelowna is going to still be subjected to the tax,” Findlater said.
Kelowna Mayor Colin Basran, who earlier warned the tax could be “disastrous” for the city’s economy, declined comment Monday on James’ changes.
In a report to West Kelowna city council earlier this month, city manager Jim Zaffino estimated the speculation tax could apply to about 600 homes, with the owners of those properties having to collectively pay the government $10 million, in addition to regular property taxes.
Findlater said Monday Zaffino will present new information to West Kelowna city council tonight on the tax’s impact as a result of the changes announced by James on Monday.
Aside from the speculation tax’s economic impact, Findlater said he was philosophically opposed to a tax that applies to other Canadians but not to British Columbians.
“Just about everyone in the Okanagan has come from someplace else, many of them from Alberta and Saskatchewan,” Findlater said. “Quite often, the way they come here is to buy a place before they retire, then move here when they do retire.”
Liberal Leader Andrew Wilkinson said the minority NDP government appears to be taking a trial and error approach to tax policy, which does not inspire confidence.
“They seem to think they can attack speculation with a tax that is not about speculation,” he said.