The following information was written by Kelowna Citizens for Property Tax Fairness. It is for educational purposes only.
Property taxes are taxes that citizens pay to receive all sorts of services from our local municipality and regional district.
However, the municipality provides exemptions for qualifying, Kelowna-based, registered non-profit and charitable organizations using property for municipal, recreational, religious, cultural or charitable purposes.
These exemptions are given to places of worship, private schools & hospitals in 5 year cycles. For other non-profits, the organizations are required to submit yearly applications.
All organizations that require renewal have to submit their applications by July 15th.
One of the problems with property tax exemptions is that some buildings within certain classifications are not assessed at market value. BC Assessment Authority does not assess at market value some buildings and property that have automatic exemptions; hence even parts of buildings or property that are used for financial profit are given unintended greater exemptions because they are under-assessed by the BC Assessment Authority
Go to the link below to find the Kelowna 2016 list of permissive tax exemptions
You can look at actual property assessments by BC assessment here: https://evaluebc.bcassessment.ca/
There are certain buildings that won’t even show any assessment as they have not been assessed recently. BC assessment does not have the impetus to go to these places and re-assess unless they are given a higher classification. For instance, a religious place of worship is a class 8 property which is often under assessed, if it is sold, usually at market value to a private for profit business or residential use, it will be re-assessed at market value and will contribute to the property tax revenue pool.
To understand BC property classes go to the below link:
Agricultural Land within Kelowna boundaries
There is a lot of agricultural land within Kelowna city boundaries. Agricultural land and qualifying farms are given significant property tax exemptions. The agricultural land reserve is an important tool to keep agricultural land for present and future food production. However, farm land is also being used to build large estate houses and with low qualifying criteria for farm production, the city of Kelowna is losing tax revenue to wealthier citizens.
Farmers must sell qualifying agricultural products in each reporting period (i.e., every year). Minimum income requirements are calculated as follows:
a) $10,000 on land less than .8 hectares (1.98 acres);
b) $2,500 on land between .8 hectares (1.98 acres) and 4 hectares (10 acres);
c) on land larger than 4 hectares (10 acres), you must earn $2,500 plus five per cent of the actual value of any farm land in excess of 4 hectares;
d) $10,000, in order to qualify unused land where the area in production by the owner makes up at least 25 per cent of the portion of the parcel outside the ALR. Some sales of qualifying agricultural products must occur every year.
Charitable Tax Status
Did you know that charitable organizations in Canada are required to report their financial information to Revenue Canada? You can find financial information on any registered charitable organization by going to the below site.
You can examine organizations that are given Kelowna property tax exemptions with their actual earnings. You can find out how much the organization earns and what they do with the money, including how much goes to the administration and who they donate to.
There are many organizations that are given Kelowna PTE’s which donate to international organizations that have nothing to do with Kelowna.
Do we need so many property tax exemptions?
Property tax exemptions (PTE) are an important tool to preserve cultural, recreational, agricultural and charitable activities. However, there are many PTE’s that overlap with similar ‘so called charitable’ services. Is it the responsibility of Kelowna residents to fund so many similar services through property tax exemptions?
As property taxes creep upward every year, should city council make some hard decisions and create a system that reflects actual charitable Kelowna services vs the many similar social club services.
This coming May, there is going to be a provincial election. You can ask the candidates pertinent questions on provincial property exemptions which include places of worship and the surrounding property. You can ask the candidates about updating the agricultural land reserve property exemptions to reflect actual usage and the low limits ($2,500) for qualifying as a farm and the accompanying tax exemptions.
You can ask city council about why there are so many PTE’s for similar, overlapping organizations.