Kelowna is looking at long-term planning for its financial future as city council recently approved a tax increase of 3.94 per cent.
This tax increase would add about $86 to the property taxes of the average homeowner per year, and it is part of a long-term financial plan that should see significant increases in the city’s revenue over the next eight years.
Big opportunities for developers
According to the Kelowna Daily Courier, annual forecast revenues from now until 2026 are about $600 million, and between 2027 and 2030, total revenues are pegged at $2.7 billion.
Taxation demand in the city has gone up overall, reaching $166.2 million, up from $157.7 million. That’s an increase of $8.5 million, or 5.4 per cent. Some of that will come from other areas, such as new construction, but property taxes are being increased as well, a sure sign that the city is still growing, which is a positive for commercial development.
Where do your taxes go?
City staff say municipal taxes cover about a quarter of the city’s operational revenues. Some of the money brought in this year will go toward water, wastewater and stormwater projects, while another portion of the funds will go towards the city’s parks and public spaces budget.
Kelowna has the second highest capital budget of cities with populations under 500,000 people, with $22.3 million to be invested in parks. As Kelowna encourages active lifestyles, this will draw in even more people looking to make the city their home.
Another significant portion of the budget will go towards public safety, including the creation of more positions within the RCMP. More police will hopefully mean a reduction in crime, which is always comforting to those looking to invest who are concerned about theft or vandalism.
How the tax increase will affect the housing market
While people often cringe upon hearing the phrase “tax increase,” there are actually a lot of benefits to an increase like Kelowna City Council has approved. Cities that have higher property taxes are more likely to not have an over-inflated housing market. They also have far less speculative investment, which can also make a city unaffordable. Vancouver has some of the lowest property taxes in the province, but it’s also one of the most unaffordable cities in Canada, which prices many people out of that market.
While there may be some short-term grumbling, in the long-run this increase can only be beneficial to residents, businesses, developers, and everyone in between. Much like an athlete training for an event, there needs to be some short-term pain for long-term gain.
What does this mean for developers?
Revenue like this means the City will have money to spend on capital projects and other developments. Which makes the city a more attractive place to live, which means more customers and clients for commercial developers.
With 32 per cent of the budget going towards infrastructure, and 10 per cent going towards planning and development, it means the City is planning for growth, both in residential and commercial areas. And that growth needs the proper infrastructure in place, which means a wide array of different types of commercial development can go forward.
The Mayne Brothers can help you find the perfect commercial properties
Developers that are looking to get into the commercial real estate market would do well to find a realtor with plenty of experience in that side of the market. The Mayne Brothers have 40 years of combined experience and are ready to guide commercial property developers through the Kelowna market.
Kelowna is looking at investing in the city’s future for its residents which means more opportunities for development.
Want to find out more about the commercial real estate market? Reach out to The Mayne Brothers by calling 1-800-430-5030.