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: As of 2026, first-time homebuyers qualify for a full exemption on homes up to $835,000, with a partial exemption up to $860,000. Newly built homes qualify for a full exemption up to $1,100,000.

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: As of March 2026, the federal government has moved to fully eliminate the 5% GST on newly built homes up to $1 million for first-time buyers.

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.

• 1% for B.C. and Canadian residents (up from 0.5%)

• 3% for non-residents or satellite families (up from 2%)

Note: The B.C. resident tax credit has been doubled to $4,000 to help local homeowners.

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.

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: The federal ban on foreign ownership of residential properties is in place until January 1, 2027.

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 at 20%.

• A sliding scale applies between 12–24 months.

• Applies to all property types, including assignments of contracts.

Federal Flipping Tax – In Effect Since 2023

This Canada-wide tax treats profits from properties sold within 12 months as business income  meaning you’re taxed on 100% of the profit.

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.

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.