Speculation tax could delay major Kelowna development

The company behind a major development in downtown Kelowna said it won’t be marketing the project until it knows what is happening with the provincial government’s planned speculation tax.

Westcorp has approval to build a 33-story hotel and condo tower in the heart of downtown Kelowna, but said at this point it is continuing with the project “cautiously” because of the planned tax.

Spokesperson Gail Temple said the company has already heard from potential buyers and that the speculation tax is going to cause people to rethink whether they want to buy a second home in the Okanagan.

“We have got to believe that people will come to their senses and not bring in a tax that is so damaging to the province,” Temple said.

Tweet This Click to share quote on Twitter: "We have got to believe that people will come to their senses and not bring in a tax that is so damaging to the province," Temple said.

Temple said the company is continuing with plans for a presentation center for the project “in hopes that in the next number of weeks or months that this will get sorted out.”

“You can’t really move forward with a really large project like this until you have some certainty about how you are going to market it,” Temple added.

Watch Below: The speculation tax is meant to increase the availability of affordable housing, but some worry it could tank real estate prices and suppress development.

2:08 Speculation tax critics want Okanagan exemption

The property tax is part of the province’s plan to make the housing market more affordable, targeting mainly unoccupied properties and those being used for short-term rentals.

The full details for the tax have yet to be announced.

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The tax is scheduled to come into force next fall in five areas of the province, including Kelowna and West Kelowna.

Watch Below: Height of proposed Westcorp tower debated at Kelowna City Hall.

1:39 Kelowna city planners say proposed downtown hotel is too tall

The City of West Kelowna and the Kelowna Chamber of Commerce have spoken out against the proposed tax, arguing it would put a chill on development and potentially tank the local real estate market.

They’ve asked the province to exempt Kelowna and West Kelowna from the tax.

Asked about the push to exempt the Okanagan from the planned tax, Finance Minister Carole James said she was considering the feedback from the region, but pointed out Kelowna’s low 0.2 per cent vacancy rate.

“That shows that it is a struggle for people to be able to live in Kelowna, for workers to be able to work and live in the their community. That has an impact on businesses as well,” said James.

– with files from Blaine Gaffney and Kelly Hayes