Understanding Real Estate Taxes in the Okanagan 🏡

By Mark Drelich – Real Estate Agent, Engel & Völkers Okanagan

If you're buying or selling a home in Kelowna or anywhere in the Okanagan, it's important to understand the various taxes that may apply to your property. From federal flipping rules to GST on new builds, here's a breakdown of what you should be aware of — including a few lesser-known taxes that could impact your bottom line.

🧾 Property Transfer Tax (PTT)

This provincial tax is paid when property ownership changes hands in B.C. and is based on the property's fair market value:

• 1% on the first $200,000
• 2% on the portion from $200,000 to $2,000,000
• 3% on the portion from $2,000,000 to $3,000,000
• 5% on the portion above $3,000,000

Exemptions:
First-time homebuyers and newly built homes may qualify for full or partial exemptions — let's talk to see if you qualify!

🏗 GST on New Homes – Current Rules & What May Be Coming

Current Rule:
If you're buying a new or substantially renovated home, you're likely to pay 5% GST on the purchase price.

Rebates:

• Full GST rebate if the home is under $350,000
• Partial rebate between $350,000–$450,000
• No rebate for homes over $450,000

Note: This tax usually doesn't apply to resale homes.

Proposed Changes:
There are two potential changes on the horizon:

• A federal proposal to eliminate the 5% GST on new homes up to $1 million for first-time buyers.
• A Conservative proposal to eliminate GST on all new homes under $1.3 million, regardless of buyer status.

These could make a huge impact on affordability, especially in growing markets like Kelowna and the Okanagan.

🏘 Speculation and Vacancy Tax (SVT)

This provincial tax applies to residential properties in areas like Kelowna if they're not used as a primary residence or rented out long-term.

• 0.5% for B.C. residents
• Up to 2% for non-residents or satellite families

Coming January 1, 2025:
This tax will apply to virtually all of the Okanagan. If you're not living in or renting out your home, this tax could apply.

🚫 Underused Housing Tax (UHT)

The Underused Housing Tax is a federal tax of 1% on the assessed value of a vacant or underused residential property, primarily targeting non-resident, non-Canadian owners.

Key points:

• Applies across Canada, including Kelowna and the Okanagan.
• Annual filings are required, even if you qualify for an exemption.
• There are stiff penalties for failing to file — up to $10,000 per individual or $50,000 per corporation.

Exemptions:
May include Canadian citizens, permanent residents, or homes rented out long-term. It's a complex tax, so connect with me and I can refer you to an accountant for specifics.

🌍 Foreign Buyers Tax & Federal Ban

Foreign Buyers Tax:
If you're a non-Canadian purchasing in the Okanagan, you could be subject to a 20% foreign buyers tax — unless you're exempt.

Foreign Buyers Ban:
As of now, there is a federal ban on foreign ownership of residential properties in place until January 1, 2027.
This ban applies across much of Canada, including Kelowna and the Okanagan.

Exemptions include:

• Temporary residents working or studying in Canada
• Refugees
• Certain development or commercial purchases
  Let's connect to determine whether your situation qualifies.

🏚 Empty Homes Tax – Vancouver Only

While not yet in the Okanagan, Vancouver’s Empty Homes Tax charges 3% of assessed value for homes left vacant for most of the year. It’s worth watching in case similar policies are introduced in our region down the road.

💸 BC Home Flipping Tax (NEW)

Effective 2025, the BC Home Flipping Tax applies to properties sold within 24 months of purchase.

• Profits from a sale within 1 year are fully taxed.
• A sliding scale applies between 12–24 months.
• Applies to all property types, including assignments of contracts.

This is meant to cool speculative flipping and help stabilize the Okanagan housing market.

🏠 Federal Flipping Tax – In Effect Since 2023

This Canada-wide tax treats profits from properties sold within 12 months as business income — even if it's your primary residence. Unlike regular capital gains, there's no 50% exemption, meaning you’re taxed on 100% of the profit.

Some exceptions apply, such as life changes (death, divorce, relocation, etc.).

👋 One Last Thing...

💡 I’m not a qualified accountant — but I’ve built strong relationships with trusted accounting professionals who specialize in real estate tax planning. If you need tailored advice, I’m happy to connect you with someone excellent.

Have questions about taxes and how they affect your property in the Okanagan?

Whether you're buying your first home, planning to flip a property, or investing from abroad, it's important to have the right information up front. Let's chat — I’m here to help make things simple, strategic, and stress-free.

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