Kelowna increased land values; now residents, businesses are getting the bills
The City of Kelowna was far ahead of the provincial government when it streamlined higher density housing in core areas almost two years ago.
The city made it easier to redevelop existing properties to gain height or density without going through lengthy and expensive city processes to change land designations.
It also made those properties more valuable.
But now the bill is coming due — for the businesses and homeowners and non-profits in those areas in the form of property taxes.
Land values in the urban centres — downtown, Capri-Landmark, Midtown/Orchard Park, Rutland and Pandosy — went up far above other areas of the city. The late-year timing of the bylaw changes meant the changes weren’t realized until this assessment year.
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Roughly 5% of those properties got bills 30% higher, though not all of that was due to the city’s actions.
“That, combined with some property transactions in some of those areas, which were large transactions, led, I believe, BC Assessment to value the properties higher,” said Ryan Smith, the city’s top planner.
For most property owners, the increase in property taxes is naturally offset by owning more valuable property, but not everyone was content with that trade-off.
“When they got their assessments, the property owners started writing in and complaining to council,” Smith said.
That was the first indication of unintended consequences. The question is what to do about it.
On Monday, councillors approved a plan to mitigate the impact. They agreed to provide one-time grants to some non-profits to offset the increase — an estimated $1.5 million. Businesses and residences in those areas won’t get a tax break but they will have an extended deadline to pay their taxes without penalty.
It also sets up an interesting question for B.C. Assessment since the provincial government has done essentially the same thing when it cut through local government to proclaim that a fourplex can be built on any single-family lot in the province — regardless of local government zoning bylaws.
Does that mean single family property owners are going to get a big tax bill next year?
Tim Morrison, spokesperson for BC Assessment, says it’s too early to tell.
“It is… inappropriate to speculate on potential market reaction at this time. We have yet to see how the market will respond to these changes.
“There are a variety of influences that are considered every year when determining a property’s assessed value. Ultimately, the market will determine the value.”
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