The communities of Kelowna and West Kelowna had hoped to be exempt from the speculation tax, but despite changes announced Monday by the NDP, the tax will still apply to both.
“I think the changes could have gone a little bit further,” Kelowna Mayor Colin Basran said. “The changes are a good first step forward, I suppose, but we still believe the speculation tax as proposed is fundamentally the wrong way to go in Kelowna.”
Finance Minister Carole James announced changes to the controversial tax after a lot of criticism from stakeholders.
The revisions include exemptions for certain regions as well as an adjustment to the tax rate depending on whether homeowners are from B.C., out-of-province or out-of-country.
READ MORE: B.C. government exempting vacation homes from speculation tax
Despite the changes, many are still concerned about the potential impact the speculation tax may have on the central Okanagan.
“It’s a step in the right direction but a step that didn’t go anywhere near far enough,” Urban Development Institute chair, Kevin Edgecombe, said. “To me, it is really going to have negative impacts, unforeseen impacts, on tourism, on construction, on service industry and I think it will have a major, negative impact on our economy as a whole.”
Edgecombe said the speculation tax hasn’t even been implemented, but is already having a negative effect.
“I expect a number of projects will be either delayed or cancelled all together,” Edgecombe said.
The developer planning to build Kelowna’s tallest tower in the downtown core has already put its marketing plans on hold. And even with the revisions announced, it’s still not enough for Westcorp to move forward.
“We are not, at this point, prepared to go to market, you absolutely can’t,” Westcorp’s vice-president Gail Temple told Global News. “If you do not know what you will be selling these things for and if there are no buyers because they have no certainty of what this is going to mean to them, then there’s nothing we can really do about that.”
Realtors are also anxious about the potential impact. Lora Proskiw, a realtor with Royal LePage, had hoped Kelowna and West Kelowna would have been excluded from the tax altogether.
“We don’t see the point of it,” Proskiw said. “As far as I’m concerned, taxing people in this method is trying to manipulate a healthy market and from our experience, I don’t see it working in the long term and it is just creating a ton of confusion.”
While stakeholders agree something needs to be done to ease the housing crunch in the Okanagan, many do not believe the speculation tax is the solution.
“We still would like to see a true flipping tax to go after the people who are buying property solely on speculation and taking those properties out of the market for local buyers,” Basran said.