What is BC's speculation and vacancy tax, and does it apply in Kelowna?

The speculation and vacancy tax is an annual BC tax paid by owners of residential property in designated taxable areas, and those areas include Kelowna, West Kelowna, Penticton, Vernon (except Predator Ridge) and Lake Country. For the 2026 tax year the rate is 3% of the property's assessed value for foreign owners and untaxed worldwide earners, and 1% for Canadian citizens and permanent residents who are not untaxed worldwide earners. Owners who receive a declaration letter must declare by March 31 every year, even if they qualify for an exemption.

Updated October 29, 2026. Figures from the BC Government speculation and vacancy tax pages linked below.

Who pays and at what rate

Who it applies to: owners of residential property in a designated taxable area of BC. Co-owners each owe tax on their share, so two equal owners each owe tax on 50% of the assessed value.
Foreign owners and untaxed worldwide earners: 2% for the 2019 to 2025 tax years, 3% for the 2026 tax year.
Canadian citizens and permanent residents: 0.5% for 2019 to 2025, 1% for 2026, as long as they are not untaxed worldwide earners.
Untaxed worldwide earner: an individual whose unreported income in Canada is greater than their reported total income, with spouses' incomes combined. This is the category that includes members of a satellite family, where one spouse lives in Canada with little income and the other earns most of the household income overseas.
Foreign owner: a person who is not a Canadian citizen or permanent resident.

Is your Okanagan community a taxable area?

Included: City of Kelowna, City of West Kelowna, City of Penticton, City of Vernon, District of Lake Country, District of Coldstream, District of Peachland and District of Summerland.
Excluded: the Predator Ridge resort within Vernon, reserve lands, treaty lands and lands of self-governing Indigenous Nations.

The declaration

When: owners declare how they used the property in the previous calendar year. Declarations for the 2026 tax year are made in early 2027 and are due March 31.
Every year: the declaration is required annually, even if nothing has changed and even if you are exempt.
Payment: any tax owing is due the first business day in July. A 10% penalty plus interest applies to a balance unpaid after that date.

Main exemptions for individuals

Principal residence: an owner who lives and works in BC may be exempt if the property is their principal residence. The owner must be a Canadian citizen or permanent resident who is a BC resident for income tax purposes and is not an untaxed worldwide earner. With more than one home, only the one you live in longest during the year qualifies.
Tenanted property: the home may be exempt if a tenant occupies it for at least six months of the calendar year. Months can be combined across tenants. Arm's length tenancies need a written agreement under the Residential Tenancy Act, the tenant must make the home their residence, and rentals must be in at least one-month increments.
Non-arm's length tenants: can count for Canadian owners, but for foreign owners only in very limited circumstances.

If you miss the declaration

Tax notice at the maximum rate: if you do not declare by March 31, the province issues a tax notice charging tax at the maximum rate.
Late declarations: you have up to three years to submit or correct a declaration, and the administrator may accept late declarations for up to six years in some cases.

Worked examples (estimates for illustration)

Vacant Kelowna condo, Canadian owner living in Alberta: assessed value $600,000, no exemption, 2026 tax year. $600,000 x 1% = $6,000, before any tax credit.
Vacant West Kelowna house, foreign owner: assessed value $900,000, 2026 tax year. $900,000 x 3% = $27,000.
Lake Country cabin, two Canadian co-owners: assessed value $800,000, held 50/50, vacant. Each owner: $400,000 x 1% = $4,000. Total for the property: $8,000.
Vernon house rented to an arm's length tenant: written tenancy agreement, tenant in the home February 1 to September 30. That is 8 months, which meets the six-month requirement, so the owner may claim the tenancy exemption and owe $0, provided the declaration is filed.

FAQ

Is Kelowna in the speculation and vacancy tax area?
Yes. The City of Kelowna and the City of West Kelowna are both listed taxable areas.

Do I need to declare if I live in my home full time?
Yes. If you receive a declaration letter, you must declare by March 31 to claim the principal residence exemption.

What is the 2026 rate for Canadians?
1% of assessed value for Canadian citizens and permanent residents who are not untaxed worldwide earners.

Every situation is different, so talk to your accountant about your specifics.

Sources: BC Government: Speculation and vacancy tax; BC Government: Tax rates for the speculation and vacancy tax; BC Government: Taxable areas; BC Government: Exemptions for individuals; BC Government: Tenancy requirements; BC Government: Terms and definitions; BC Government: How to declare; BC Government: Special circumstances and missed deadlines.

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