New taxes hurt housing?

Housing experts around the Okanagan said the new taxes being introduced on Kelowna real estate won’t help with affordability in the region.

As part of the 2018 budget announced last week, the B.C. Government brought the foreign buyers tax to the Central Okanagan, and increased the tax from 15 per cent to 20 per cent.

A speculation tax on real estate will also be brought to Kelowna and West Kelowna in the fall, among other areas — starting at 0.5 per cent this year before rising to two per cent in 2019.

“We don’t see the business case that suggests either of these will achieve the outcome the government is saying, with respect to creating more affordability,” Dan Rogers said, executive director of the Kelowna Chamber of Commerce.

According to statistics from the Okanagan Mainline Real Estate Board, less than 0.33 per cent of all home sales in Kelowna last year were to foreign buyers, and there were zero foreign home buyers in West Kelowna.

Pamela Hanson, past-president of the South Okanagan Real Estate Board, said the province may be taking a precautionary measure due to the effect foreign buyers have had in Vancouver real estate.

But she said based on the minuscule amount of foreign buyers in the area, the new rule doesn’t make sense.

“I think the only effect it will have is people may be misinformed,” Hanson said.

The speculation will likely impact a larger amount of Kelowna and West Kelowna homeowners, as it will be geared for foreign and out-of-province property owners who don’t pay income tax in B.C.

In 2017, more than 16 per cent of home buyers in Kelowna were Canadians from other provinces — more than 10 per cent of whom were from Alberta.

The speculation tax doesn’t apply to nearby communities like Lake Country and Peachland, and Rogers said the geographical boundaries are unfair.

“We are hearing from many Albertans that have invested in this community, and we’re concerned this creates an atmosphere where we don’t encourage investment,” Rogers said.

“We’re seeing a lot of concern being expressed not just from those in Kelowna and West Kelowna, but those (in other areas) who think it’s only a matter of time before this tax may apply to them. And that’s slowing a potential investment.”