West Kelowna wants out of the provincial government’s planned speculation tax.
City council agreed today to petition Minister of Finance Carol James (in person, if possible) to leave the city out of her government’s planned tax on out-of-province homeowners.
The decision came after both city staff and representatives from the Urban Development Institute spoke to council about the impacts the tax could have on the city.
The proposed tax, which James said is part of a strategy to combat ever-rising home prices, would target B.C. homeowners who pay little or no income tax in the province. Initially, it would only apply to specific parts of the province, including West Kelowna and Kelowna.
Huge tax hike
The UDI’s Kevin Edgecombe told council today that, even if the tax doesn’t move forward, its spectre has already spooked the development community.
“Damage is already happening around us, it’s very much happening around us,” he said.
He said $23 billion of the province’s GPD, and 233,000 of its jobs, come from development, construction and related industries, and that the tax would mean many major projects get cancelled.
Westcorp specifically, he said, is “doubtful” its project will continue if the tax goes forward.
West Kelowna CAO Jim Zaffino said if development projects start drying up in West Kelowna as a result of the tax it is going to have a massive impact on the city’s taxpayers.
He pointed out that the city relies heavily on the development cost charges it levies against developers to pay for city infrastructure projects. As an example, 63 per cent of the cost of its upcoming wine trail project will be paid for through DCCs.
Mayor Doug Findlater pointed out the city incorporated has a “huge infrastructure deficit” it’s been trying to erase since it incorporated ten years ago, and it’s so far done that through DCCs.
If developments dry up, Zaffino said West Kelowna’s financial plan will have to be completely rethought. On top of that, taxpayers are likely looking at tax hikes of 5 per cent or more a year, compared to the 2 per cent hikes they have traditionally seen.
Public pushes back
Developers, industry, and politicians have driven much of the narrative around the tax since it was announced, but feedback pouring into the city shows members of the public also have strong opinions.
According to Zaffino, at the time of today’s council meeting the city had already received 238 letters weighing in on the tax. Of those, 219 were against, while only 19 were in favour.
Many who wrote letters condemning the plan said they owned homes in West Kelowna they used for part of the year, and would likely be forced to sell them if the tax moves forward.
One letter writer, whose circumstance is similar to many who wrote in, explained she lives in Calgary but spends four months every summer with her family in her West Kelowna home.
“l am shocked to hear about this tax that may lead to me selling the house I thought would be my retirement home in the future,” she writes. “l am not a millionaire, I can’t afford a tax that leaves most no choice but to sell. I pay taxes, spend money with my family in the area, and have even renovated my entire home…. I don’t know what else the B.C. government wants from Canadian families.”
“We own a vacation home in West Kelowna and our huge complex is approximately half Albertans. Judging from the strata minutes and meetings these people will not be able to pay this tax. Does anyone not realize how much money these people pump into the economy?” another wrote.
The few who wrote in support of the tax mostly did so because they believe it will help housing affordability.
“This tax is mostly going to affect people that are buying second homes, mostly from Alberta. lf they can afford a second home in the most expensive places in B.C. they can afford to pay more to help bring down some of the burden we have to bear—a burden we bear because of inflated prices as a result in part of the extra competition the second home buyers have created,” one person wrote.
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