Property tax deferment aids seniors, families

The provincial plan helps people stay in their home by allowing them to defer property tax payments.

Although it is probably too late for this year, the Office of the Seniors’ Advocate encourages seniors to consider property tax deferment as a way to continue living independently in their own homes.

The B.C. Property Tax Deferment program allows seniors, as well as families with children under 18, to defer their annual property taxes until they sell or transfer ownership of their home, or it becomes part of an estate.

Isobel Mackenzie, the B.C. Seniors’ Advocate, says that as she travels around the province speaking with seniors, she hears of many who have a challenging time getting the money together each year to pay their property taxes. “In some cases this drives them from their homes entirely.”

Approximately 80 per cent of seniors in the province are homeowners, and some 24 per cent of senior homeowners have an annual income of $30,000 or less.

Mackenzie acknowledges that for some seniors, the idea of deferring property tax payment is an uncomfortable one, and that they may be worried about the equity in their homes. However, a substantial portion of a property’s equity remains, even after property taxes have been deferred for 10 years. A $250,000 mortgage-free home in Comox, for example, would have 92.3 per cent of its equity remaining after property taxes had been deferred for 10 years.

Jamie Edwardson, Communication Director for the Ministry of Finance, agrees that some seniors feel uncomfortable with the idea that the equity in their home is being depleted, but says that people have to make that judgement call themselves. “Seniors have to maintain a minimum equity of 25 per cent in the property. When the loan is paid off they’ll still have a fair bit of equity left in the home.”

He points out that the interest rate for the seniors’ deferment program is extremely low at 0.7%. The Ministry of Finance makes the property tax payments on the homeowner’s behalf for the duration of the loan, which is repaid when the home is sold or transferred.

Edwardson also notes that the surviving spouse of a homeowner who is part of the program may continue as part of it, even if he or she is not yet a senior (defined as anyone aged 55 or older for the purposes of property tax deferment). “We don’t kick someone out of the program if they’re already in it.”

A similar program is offered for families with children aged 18 or under, or families where a person over the age of 18 is in post-secondary education but still supported by the family. As long as the child qualifies for the program, property tax can be deferred at an interest rate of 2.7% per year. As with the seniors’ program, deferred taxes and interest are repaid to the Ministry when the home is sold or transferred.

Statistics from the Ministry of Finance indicate that since 2013, the number of people using both programs has steadily increased. In 2013, 33,761 seniors took advantage of property tax deferment, which had increased to 38,463 by March 31, 2016. Families with children using the program increased from 1,298 to 1,536 in the same period.

In addition to the property tax deferment program, seniors can also qualify for the Home Owner Grant, which can reduce property taxes by as much as $1,045 for those in northern and rural areas.

It can take several months to process tax deferment applications, due to the need to gather the necessary information, but Edwardson says that more senior homeowners, as well as those with young children, should look into the program to see if it is right for them for the future. “It’s there to help, and available should they choose to use it.” For more information, go to www.seniorsadvocatebc.ca, www.gov.bc.ca/propertytaxdeferment, or www.gov.bc.ca/homeownergrant.

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