Increase to $950,000 restores tax break for many
Derrick Penner
Sun
Finance Minister Carole Taylor raised the threshold for provincial homeowners grants to $950,000 on Friday, restoring the tax break to almost 33,000 households at risk of losing it to skyrocketing property assessments.
Taylor made the decision 11 days after the B.C. Assessment Authority sent out 2007 property assessments, which increased an average of 20 per cent and pushed tens of thousands over the old $780,000 threshold for the homeowners grant.
On Monday, Taylor told The Vancouver Sun she would consider raising the threshold. By Wednesday, however, when she saw the numbers from across B.C., it was clear action had to be a taken.
“We had to work really quickly,” Taylor said, because her ministry was flooded with inquiries from taxpayers worried about losing the grant.
She added that the Finance Ministry stuck to its policy of extending the grant to 95 per cent of households, “and to our surprise, that meant lifting the threshold [$170,000] to $950,000.”
The calls to government, she added, were mainly from seniors who were worried they would lose the grant, which for them, adds up to $845 per year.
Some 8,422 homeowners would have lost the basic homeowners grant entirely under the $780,000 threshold, according to figures extracted by Landcor Data Corp. from B.C.’s 2007 assessment rolls.
Another 24,486 would have seen their grant whittled down under the grant formula.
The basic homeowners grant is $570 to each household with an assessed value of less than $950,000. Seniors, veterans and the disabled are given an additional $275 allowance.
For properties assessed at more than $950,000, the grant is reduced by $5 for each additional $1,000 of assessed value.
That means property owners lose the basic grant entirely for properties assessed over $1.06 million. Seniors lose any assistance over $1.12 million.
And seniors greeted Taylor’s Friday announcement warmly.
“We applaud the government for being on top of this,” Rudy Lawrence, president of the Council of Senior Citizens of B.C. said.
“A few years ago, during [the Liberals’] first term, we had to do quite a bit of talking to government to get them to listen.”
Lawrence added that the homeowners grant has become an important tax break for seniors. Where he lives on the North Shore, Lawrence said he knows seniors paying $300 to $400 per month in taxes.
“That’s a fair chunk” out of very limited incomes, he said.
Joyce Jones, co-chairwoman of the B.C. Healthcare Coalition said there are a lot of seniors who are “dollar poor but house wealthy” who will be helped by raising the threshold.
Jones added that seniors on pensions can’t increase their incomes. So when their property assessments rocket up, the cost of staying in their homes makes them more of a liability than an asset.
“[Rising assessments] are a double edge,” Jones said. “Some people want them to go up in case they need that income from their homes.
“On the other hand, if they go up, they lose some of that help for keeping their houses.”
Taylor said she is in an argument with the federal government over how property values should affect calculations of provincial wealth and equalization payments. Some claim high property values indicate a province has more wealth to tap in taxes.
I’m trying to argue . . . that increases in [property] valuation doesn’t mean people have got a whole lot of extra money to pay taxes,” Taylor said.
“What we’re trying to do is help them stay in their homes by giving them tax relief.”
TAX BREAK REGAINED
Skyrocketing property assessments threatened to claw back the provincial homeowners grant from thousands of B.C. residents. Below are the number of households that regained the break when Finance Minister Carole raised its threshold to $950,000 from $780,000.
B.C. 32,908
GREATER VANCOUVER 26,081
FRASER VALLEY 351
Source: Landcor Data Corp.
© The Vancouver Sun 2007
