BC Budget 2026: 4 Changes That Affect Kelowna Real Estate (Buyers, Sellers, and Builders)
Happy Wednesday!
BC’s 2026 budget (released February 17, 2026) includes changes that can affect the Kelowna real estate market—from vacation homes, to luxury properties, to infill multifamily builds.
If you’re 55+, pay extra attention to Impact #4. The new rules can make your deferred tax balance grow much faster over time.
Below is a simple breakdown of what changed, who it hits, and what it means in Kelowna and the Okanagan.
Impact #1: Speculation & Vacancy Tax (SVT) — Foreign Rate Goes Up Again
What changed
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2026 and later:
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3% for foreign owners / untaxed worldwide earners
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1% for Canadian citizens + permanent residents (who still owe SVT)
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Starting the 2027 tax year: the foreign/untaxed rate increases to 4% (the Canadian/PR rate stays 1%).
Simple rate table
| Owner type | 2025 | 2026 | 2027+ |
|---|---|---|---|
| Foreign owners / untaxed worldwide earners | 2% | 3% | 4% |
| Canadian citizens / permanent residents (if SVT applies) | 0.5% | 1% | 1% |
What it means in Kelowna & the Okanagan
This matters most for:
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People with a vacation home or second home that sits empty too often
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Owners who live elsewhere but own in Kelowna / West Kelowna / Lake Country / Peachland
Local note: Some areas are not in the SVT taxable region, so SVT may not apply (example: Westbank First Nation lands and some rural areas like Ellison). Location matters. (If you’re unsure, I can help you check your address.)
Impact #2: Additional School Tax — More Cost for Homes Over $3M (Effective 2027)
What changed
Starting 2027, the Additional School Tax rates rise:
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From 0.2% → 0.3% on the portion $3M–$4M
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From 0.4% → 0.6% on the portion over $4M
Who it hits in Kelowna
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Luxury lakefront
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Estate properties
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High-end condos/penthouses
What it means
If you’re buying or holding a higher-value home, this is another yearly cost to plan for. It doesn’t change most transactions—but it does add pressure on the top end of the Kelowna real estate market.
Impact #3 (Big for Builders): PST Expands to Housing/Real Estate Services — Starts Oct 1, 2026
This is the one many people will miss, but it can hit Kelowna developers, infill builders, and landlords the hardest.
What changed
Starting October 1, 2026, BC plans to apply 7% PST to several professional services (subject to the budget bill becoming law).
Examples include:
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Accounting & bookkeeping
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Architectural services
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Engineering & geoscience services
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Rental property management
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Strata management
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Some non-residential real estate services
Why this matters for Kelowna infill multifamily
These are “soft costs” that every project uses. If soft costs rise, projects can:
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become harder to finance
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get delayed
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or not get built at all
BCREA warned this makes development harder at the exact time supply is needed.
Bottom line: If building costs go up, buyers and renters often feel it later through higher prices or rents.
Impact #4 (55+ Homeowners): Property Tax Deferral Now Costs More — and Compounds
BC’s Property Tax Deferral program is used by many seniors to stay in their homes.
What changed (for 2026 and later deferrals)
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Interest changes from prime minus 2% (simple interest)
to prime plus 2% (compound interest, compounded monthly)
Why this matters
Compound interest means the balance can grow faster over time—especially if you defer for many years.
Also, reporting says just over 83,000 people aged 55+ used the program in 2024/25, and the Seniors Advocate warned the change could discourage the seniors who need it most.
If you’re considering deferring: talk to your financial advisor so you understand the long-term cost before you stay in (or join) the program.
Quick FAQ
Does BC Budget 2026 crash the Kelowna real estate market?
No. But it raises costs to own and build, which can affect prices and supply over time.
When does PST start applying to these services?
October 1, 2026 (if the budget bill passes).
What is the SVT rate in 2026 for Canadians/PRs who owe it?
1%.
What is the SVT rate in 2027 for foreign owners?
4%.
The Bottom Line (Kelowna + Okanagan)
These changes don’t “flip the market” overnight. But together, they increase the cost of:
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owning property
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building housing (especially infill multifamily)
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and holding property long-term
If you’re buying, selling, investing, or building in Kelowna, West Kelowna, Lake Country, or Peachland, and you want to know how this impacts your exact plan, reply anytime.
Mark & Maddie
Selling Okanagan Group | eXp Realty Kelowna
📞 778-946-6454
📩 [email protected]
