Downtown highrise buyers appear undeterred by tax
Developer behind One Water Street project says he’s seen ‘no let-up in interest’ despite fears new speculation tax will slow building plans
Even with the pall of B.C.’s new speculation tax, sales are brisk at Kelowna’s soon-to-betallest building.
“There’s been no let-up in interest in One Water Street (the 36-storey East Tower),” said North American Development Group managing partner Henry Bereznicki.
“And the announcement we plan to move ahead with the (29-storey) West Tower sooner than expected has generated even more anticipation.”
Such bold resilience is a surprise in the wake a speculation tax that has many other developers fearful sales will slow or building plans will be derailed.
The speculation tax, designed to increase affordability, boost the number of rentals and moderate the overheated market, would see an additional two per cent tax slapped on properties owned by people who don’t earn an income in B.C. and leave the home empty for most of the year.
Two per cent on a property assessed at $650,000 would be $13,000 a year in addition to regular property taxes.
The two per cent would also apply to B.C. owners who earn an income in this province but leave the home vacant for most of the year.
However, they could get a rebate to cover some of the extra cost. But, a British Columbian with an annual income of $100,000 would only get $7,000, not enough to offset the additional $13,000 in the example above.
Therefore, buyers at One, located at the corner of Sunset Drive and Water Street, are either going to live there full time, rent their places out as an investment or are flush enough to be able to use them part time as a vacation home and not worry about the speculation tax.
“Everyone knows there’s a shortage of wellappointed highrise homes and a growing demand to live in Kelowna. People from the Lower Mainland and elsewhere are joining Okanagan buyers in purchasing these homes. With Kelowna home prices likely to rise even further, people know now’s the time to buy. Our hope is the province will reconsider the tax and adopt more appropriate measures to aid affordability, which will not punish B.C. or Canadian buyers,” Bereznicki said.
Forty-six per cent of the 222 units in the East Tower have been bought by Vancouver and Fraser Valley residents.
Construction on the East Tower will start soon for completion in 2020.
With condos in the first tower almost sold out, One Water has moved up pre-sales of the second highrise to next month from October.
The 20-storey Ella condo rising at the corner of Ellis Street and Lawrence Avenue downtown is also almost sold out.
The 14-storey condo tower Sopa on South Pandosy Street is nearing completion and has been sold out for years.
Proposed highrises that have yet to start construction include a 32-storey condo-hotel beside Kerry Park, the 14-storey Ellis Parc beside Prospera Place and the first tower on the former Bargain Shop property on Bernard Avenue downtown.