UDI: New tax unfair penalty

The Okanagan chapter of the Urban Development Institute is taking the province to task over its controversial new speculation tax.

The tax, introduced in last month's provincial budget, is set to be enacted in the fall.

It would impose a two per cent property tax annually on foreign and domestic buyers who do not pay B.C. income tax in selected areas of the province, including Kelowna and West Kelowna.

In a letter addressed to Premier John Horgan, Finance Minister Carole James and Municipal Affairs and Housing Minister Selina Robinson, the UDI says the reality of the tax is it will unfairly penalize a much larger segment of the population.

"We are certain that jobs will be lost in the Okanagan, and there is a concern this tax, while intended to create affordability, will unintentionally harm the tourism sector, many forms of small business, and the British Columbia economy as a whole," the UDI said in its letter.

"We have already heard from many people who are "re-thinking" their interest in the Okanagan and B.C. in general as a result of this."

The UDI further says they are hearing from some "significant development projects" that will be abandoned if this tax stands as is.

They claim the consequences of the tax will be dire.

"Anecdotal evidence indicates that 15 to 20 per cent of residential properties in Kelowna and the Lower Mission alone are going to be negatively impacted by this speculation tax.

"We are already hearing of many stories of people who currently own property in either Kelowna or West Kelowna who will be forced to sell if this tax goes through."

The UDI believes the tax, designed to encourage affordable housing and lower housing prices, will have the opposite affect.

The organization is recommending instead what it calls a 'true speculation tax," one which targets speculators who drive up the cost of housing.

They suggest an alternative could involve diminishing provincial income tax for speculative residential properties sold within one, two or three years.

A similar letter was also forwarded to the province from the Canadian Home Builders' Association Central Okanagan.

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