As the Central Okanagan grows, home speculation shrinks
The provincial Speculation and Vacancy Tax seems to be doing its job in the Central Okanagan.
The tax was designed to cut down on the number of homes bought by investors who left them unoccupied. While the number of homes that are subject to the tax grew by almost 1,400 in the two years since the tax took effect for the 2018 tax year, the number of properties that actually paid the tax has gone down.
Kelowna and West Kelowna are the only two Interior B.C. cities where the tax is collected.
Between them, they had 60,517 homes in 2018, the first year the tax was collected. Of those, only 612 had to pay the tax.
In 2019, there were 1,360 more homes but 64 fewer that paid the tax.
“The 2019 declaration data . . . show(s) an increasing number of properties are being repurposed as long-term rentals,” Finance Minister Selina Robinson said in a news release. “This change in behaviour, and the tax continuing to capture speculators while exempting almost all British Columbians, shows this tax is working for the people of our province.”
Despite fewer owners of properties in the Central Okanagan paying the tax, revenue jumped from about $3 million in 2018 to $4 million in 2019.
That’s due, at least in part, to a change in the tax levy.
In 2018, all those required to pay the tax paid 0.5 per cent of its assessed value. That rate stayed the same for Canadian owners in 2019 but jumped to two per cent for foreign owners.
In Kelowna, there were 25 foreign owners in 2018, down from 41 the year before. In West Kelowna, that number dropped from six in 2018 to zero.
In Kelowna, the speculation tax was collected on 397 out of 48,858 properties in 2019. In West Kelowna, it was paid on 151 of 13,019 properties.
All homeowners in the two cities have to fill out declaration letters each year to claim an exemption from the tax. Those will be mailed to Kelowna residents from Feb. 5-8 and West Kelowna residents from Feb. 8-11. They must be returned by March 31 and taxes are due July 2.
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