What types of projects are eligible?
Residential, commercial and mixed-use development projects are eligible for tax exemptions in the City Centre with different requirements for Tax Area 1 and Tax Area 2. Residential, commercial and mixed-use projects are also eligible for tax exemptions if they are within Tax Area 3 in Rutland Urban Centre. All projects must be consistent with the future land use designation for the parcel, as set out in Kelowna’s Official Community Plan and meet the requirements of the Revitalization Tax Exemption Bylaw.
Where are the exemptions available?
Currently, the incentives are available in Tax Area 1 and Tax Area 2 within the City Centre and within Tax Incentive Area 3 in Rutland Urban Centre.
What are the different policies for Tax Areas 1, 2 and 4?
Tax Area 1 allows for a 100% municipal tax exemptions on the revitalization amount on the parcel for any residential or commercial project in the area. In contrast, Tax Area 2 encourages larger projects by providing a 100% revitalization amount on the parcel, for a project with minimum floor area of 3,716m2 (40,000 sq ft) or 75% of the Revitalization Amount on the parcel which can be attributed to a residential land use, and/or 50% of Revitalization Amount on the parcel which can be attributed to a commercial land use, for a project with a floor area of less than 3,716 m2 (40,000 sq. ft.). Tax Area 4 allows for a 100% municipal tax exemptions on the revitalization amount on the parcel for any project in the area.
I am doing a major renovation of an existing building, is my project eligible?
For all of the active incentive areas, the project must have a construction value of $300,000 or greater, determined by the building permit issued for the project.
What if I am doing a project in Tax Area 3?
Tax Incentive Area 3 was capped at 200,000 sq. ft. of floor area. As of December 2016, there is no more capacity for projects within Tax Area 3.
What part of my taxes are exempt?
The program provides the exemption on the “revitalization amount”. This is defined in the Revitalization Tax Exemption Bylaw as the municipal portion of property tax calculated in relation to the increase in the assessed value of improvements on the property resulting from the construction or alterations as outlined in section 6 of this bylaw;” For example, if you build a four storey building on a lot that was previously vacant you would receive a municipal tax exemption for 10 years on the value of the new building (the improvements). The tax exemption does not extend to the land value.
When will my tax exemption start?
Generally, the tax exemption will begin the year after the project is constructed and occupancy has occurred. However, BC Assessment has a September deadline for new buildings to be assessed. For example, if a project completes construction in December of 2017 it will have missed BC Assessment’s deadline for new projects. Therefore, the building will be assessed in 2018 with the ten-year exemption starting in 2019.
At what point do I apply to the Revitalization Tax Exemption?
At a minimum, you should have a Development Permit application submitted before you apply. But, generally, you should receive direction from the planner that you have been assigned as to the appropriate time to apply for a tax exemption.
Source: City of Kelowna online service