Starting October 1st, 2026, British Columbia property owners will have to pay 7% provincial sales tax on rental property management services and strata management services.
Combined with increasing rental vacancy rates (6.9% in Kelowna), rental increases capped at 2.3%, and a ~50% increase in school tax for properties over $3m, BC Budget 2026 is not doing any favors for property investors.
For owners with empty properties, the Speculation & Vacancy Tax went up on January 1st: Canadian Citizens/Permanent Residents now pay 1% per year, while Foreign Owners/Untaxed Earners pay 3%.
If you’re worried about declining rental rates or increasing vacancies, remember that Kelowna is still one of Canada’s most desirable cities.
Unless you have a great reason to sell now, property investors should know the facts and remember Kelowna’s long-term value and potential.
From 2024 to 2025, only studio and one-bedroom rentals posted price declines in Kelowna. Meanwhile, our average rents increased from $1,871 to $2,087, with 2-bed and 3-bed units posting the largest price gains.
| Oct-24 | Oct-25 | Percent change | |
| Studio | $1,582 | $1,391 | -12.1% |
| One-bed | $1,713 | $1,670 | -2.5% |
| Two-beds | $2,105 | $2,442 | +16% |
| Three-beds | $2,393 | $2,563 | +7.1% |
CMHC: Privately Initiated Apartment Structures of Three Units and Over, Turnover units
We’re seeing a similar trend with Kelowna’s vacancy rates: one-bedroom apartments are 9.1% vacant, two-bedrooms are 5.5% vacant, and more popular three-bedrooms are just 4.8% vacant.
The good news for long-term rental owners?
Short-term rental restrictions are lifting in Kelowna, which means the pool of available rental inventory will shrink, driving stronger demand for traditional rentals that provide stable, year-round cash flow.
Vantage West Property Management: Your Partner Through Changing Markets
At Vantage West Property Management, we were founded by investors for investors.
Our team has decades of combined experience as landlords, realtors, and portfolio managers right here in the Okanagan Valley, and we’ve lived through challenges like this before.
That’s why our entire model is built around protecting your ROI — even when markets shift or the rules change.
Here’s how we’re making sure the 7% PST charge won’t ruin your return on investment.
- Long-standing relationships with trusted local vendors across Kelowna, West Kelowna, Lake Country, Peachland, and Vernon. Because we manage hundreds of properties, we can negotiate preferred pricing on maintenance, repairs, and cleaning. We believe in preventive maintenance to avoid expensive reactive fixes and keep property values high.
- Discounts for multi-property owners. If you own more than one rental, we offer volume discounts as low as 8% instead of the standard 10%.
- Accurate market-based pricing. Our vast portfolio of Okanagan rental properties means we have valuable market rent data and can maximize your income while making sure vacancies stay low. Check out our guaranteed rents program.
- Professional Tax Optimization. We handle full record-keeping, expense tracking, and reporting so you (or your accountant) can easily claim every eligible deduction.
- Semi-annual ROI reviews. You’ll meet with one of our 13 licensed property managers who quantifies your returns, identifies cost-saving opportunities, and delivers proactive strategies to maximize your net income.
Ready to Protect Your Kelowna Investment?
If you’re worried about how BC Budget 2026 will affect your Kelowna rental portfolio, get a free, no-obligation rental analysis from us today.
We’ll analyze your properties, show you exactly where we can cut costs and boost efficiency, and provide a clear picture of how professional management pays for itself, even with the new 7% PST.
Experience stress-free property investment with Vantage West Property Management — the proud 2025 Best of Kelowna Gold Winner for Property Management with 4.8 stars on Google.
https://www.propertymanagementkelowna.com/contact-us/
Sources:
Notice 2026-001: Notice to providers of professional services
https://www2.gov.bc.ca/gov/content/taxes/sales-taxes/pst/publications/notice-professional-services
Tax rates for the speculation and vacancy tax
https://www2.gov.bc.ca/gov/content/taxes/speculation-vacancy-tax/how-tax-works/tax-rates
Additional school tax rate
Rental Market Survey Data Tables