Photo: Kamloops

Areas that apply for the City of Kamloops’ new revitalization tax exemption for rental buildings are identified in orange.

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Kamloops City Council is poised to adopt a new property tax exemption to incentivize the construction of new rental housing in central areas of the city.

The 10-year exemption would apply to buildings with 10 or more rental units, and the council gave the first three readings of the bylaw at its Oct. 22 meeting by a vote of 8-1 with only Mayor Reid Hamer-Jackson agreeing. he opposed. The council will adopt the bylaw on Tuesday.

The exemption applies to all of North Kamloops, downtown, southwest Kamloops, and the central Westsyde and Valleyview areas.

The bylaw exemption applies to areas near Kamloops’ three transit interchanges: Lansdowne, North Shore and Thompson Rivers University and areas where higher density residential development has lower parking requirements and a higher degree of walkability, a staff report to the council stated.

The goal of the statute is to increase housing supply, stimulate and encourage new private investment in rental housing, and encourage higher density residential development, according to the report.

It’s also a recommendation of the city’s Housing Accelerator Fund action plan approved by council last September.

Count. Kelly Hall noted during the Oct. 22 meeting that the move makes sense in the long term since the city would begin collecting the deferred taxes once the exemption period ends.

“There is a tremendous opportunity for taxation within the community,” Hall said.

The tax exemption applies to 100 percent of the increase in assessed value of improvements that create purpose-built rental housing units.

The city will continue to collect tax revenue from the land and from the increase in the assessed value of the units during the exemption period, as the exemption only applies to the increase in the assessed value of improvements during the construction of a building.

Tax revenues from the land and units will tend to increase due to increasing assessed values ​​and any applicable incremental increases in property tax rates over time, according to the city staff report.

A tax exemption certificate issued pursuant to statute does not exempt the owner from applicable local service taxes.

City of Kamloops Director of Development, Engineering and Sustainability Services Marvin Kwiatkowski told council at the meeting that the city is seeing many potential projects “in the queue” currently, but that there are not many additional rental units that reach the market.

Hamer-Jackson said he feels we are in a “tough economic time” with high interest rates, and he wasn’t sure the tax incentive would do much to spur development. He said he believes the city needs to do a better job of promoting its tax-exempt areas to the public and limit the focus on incentives for the few developments that are ready to hit the market.

The city also has revitalization tax exemption bylaws to encourage commercial and residential development in the downtown and north shore, redevelop existing hotel or motel sites, and build new child care centers.

The new tax exemption only applies to purpose-built rental housing secured by a housing agreement statute, and applies to both provincial and municipal taxes.

The new statute does not apply to units titled by strata or to commercial or institutional spaces.