Speculation and vacancy tax in Penticton
By Dan Jones ·
Bottom line: Penticton and Summerland became speculation and vacancy tax areas on January 1, 2025, and the rate doubled for the 2026 tax year to 1% for Canadian citizens and permanent residents and 3% for foreign owners. Every owner of residential property in a taxable area must file a declaration by March 31 each year, whether they owe anything or not. Most people living in their own home are exempt, but the exemption only applies if you declare it. Miss the deadline and you are billed as though no exemption applies, which on an average Penticton home is a substantial amount for a piece of paperwork. If you have owned here for years and have never dealt with this, it is new to you and it is not optional.
I am Dan Jones, a REALTOR with Royal LePage Locations West in Penticton, licence number 1118346, licensed since 2004. I am not an accountant and this is not tax advice. What follows is what applies to property owners here and where to check your own position, and for anything about your specific circumstances you want your accountant.
What changed, and when
The speculation and vacancy tax has existed in BC since 2018, but for most of that time it covered the larger urban centres and not the South Okanagan.
The City of Penticton and the District of Summerland became designated taxable areas on January 1, 2025. If you have owned property here since before then, nothing about this was part of your routine until recently.
The rates then changed for 2026:
| Tax year | Canadian citizens and permanent residents | Foreign owners and untaxed worldwide earners |
|---|---|---|
| 2019 to 2025 | 0.5% | 2% |
| 2026 | 1% | 3% |
| 2027 onward | 1% | 4% |
Those figures come from the BC government’s own rates page. The tax is calculated on assessed value, which is the figure on your BC Assessment notice.
The part that catches people
The exemption is not automatic.
Most owners here live in their own homes and qualify for the principal residence exemption. But the tax works on a declare-or-be-billed basis. If you do not file a declaration, the province assesses you as though no exemption applies.
That means an owner living full time in their own Penticton house, who simply did not open the envelope, can receive a bill for 1% of their assessed value. It can be corrected afterward. It is a great deal easier not to trigger it.
Each owner declares separately. If a property is in two names, both people file.
The dates
- March 31 is the declaration deadline each year.
- First business day in July is when any tax owing is due.
The declaration you file in March covers how the property was used during the calendar year that just ended. Ownership status on December 31 is what determines the rate that applies.
Who actually owes it
The tax is aimed at residential property in taxable areas that sits empty. Exemptions cover a range of situations, with the principal residence exemption being the most common, along with properties rented on a long term basis.
The situations worth thinking carefully about here:
- A second home or cabin in Penticton or Summerland that sits empty much of the year.
- A property between tenants for an extended period.
- An inherited property nobody has decided what to do with yet.
- A place bought for a family member who has not moved in yet.
Each of those may or may not be exempt depending on the specifics, and the specifics matter. This is the point at which you want an accountant rather than a REALTOR, and I will say so rather than guess.
It is not the underused housing tax
These get confused constantly, and they are separate.
The speculation and vacancy tax is provincial, administered by BC, with a March 31 declaration. The underused housing tax is federal, with its own rules, its own thresholds and its own filing. Being exempt from one tells you nothing about the other, and some owners have to deal with both.
If you own property through a corporation, a trust or a partnership, that is another reason to get advice rather than assume.
What this means if you are buying or selling here
Buying. If you are moving to Penticton or Summerland from elsewhere in BC or from out of province, this is now part of owning here. Add the March 31 declaration to the list of annual things, alongside the home owner grant application. Neither is automatic.
Selling. For most owner-occupiers it does not complicate a sale. Your conveyancer will want the position clear because declarations and any amounts owing form part of the adjustments at completion.
Where it gets more involved is a second property that has been sitting empty. If that describes what you are selling, work out your position before you list rather than in the middle of a transaction.
Relocating from Alberta in particular: this is one of three BC costs that surprise people, alongside property transfer tax on the purchase and the annual home owner grant application. What it actually costs to sell a house in BC covers all of them together.
What to do about it
- Find out whether your property is in a taxable area. Penticton and Summerland are. Not every South Okanagan community is, and the list changes.
- Watch for the declaration package in the new year and deal with it before March 31.
- Declare even if you are certain you are exempt. That is the entire mechanism.
- If you own more than one property here, or a property through a company or trust, talk to your accountant well before March.
The BC government publishes the current rates, the taxable area list and the full exemption rules at gov.bc.ca under speculation and vacancy tax. Those pages are the authority, and they are updated when the rules change.
Rates and dates above are current as of September 2026 and come from the BC government. Provincial tax rules change, usually with the budget in late February. Check before you rely on any of it.
If you are weighing up a move and want to understand what owning here actually involves, email me at dano007@shaw.ca or call 250.488.0226.