Rise in property assessments prompts $100,000 hike in grant eligibility
Michael Kane
Sun
Live in a $1-million home? You can still get government help to pay your property taxes.
The province is raising the homeowner grant threshold for the fifth consecutive year, Finance Minister Carole Taylor announced Friday.
Homeowners will now be eligible to receive the full grant at $1,050,000 in assessed property value, up from $950,000.
The move comes just 10 days after homeowners received assessment notices showing residential property values have increased by an average of 16 per cent over the past year.
No matter what the value of their homes, homeowners aged 55-plus, as well as surviving spouses and disabled persons of any age, can also opt to defer paying their property taxes at a simple interest rate currently set at 4.0 per cent. Payment is not due until the home is sold.
Taylor said the higher grant threshold will ensure that 95 per cent of B.C. homeowners continue to get help with their property taxes, despite higher assessments.
“I think it is shocking to all of us that we’re talking about $1-million homes being the 95 per cent level,” she said in an interview
The move will allow more than 18,000 British Columbians, who would otherwise face a reduced benefit, to receive the full grant.
“The people I hear from are the seniors for the most part who bought their homes maybe after the war and they were small little bungalows,” Taylor said.
“They’re still on fixed incomes and they were worried they were going to lose that help because without that they can’t stay independent in their homes.”
The grant was introduced by the Social Credit government of W.A.C. Bennett in 1957 as a payment of $28 towards property taxes on owner-occupied homes. It was widely denounced as a political bribe but expanded over the years by both Socred and New Democratic Party governments.
Today’s basic grant entitles a homeowner to a maximum reduction in residential property taxes of $570.
An additional grant of $275 — for a total of $845 — is available if the owner is over 65, or permanently disabled, or eligible to receive certain war-veteran allowances.
Last year the additional grant was extended to low-income homeowners regardless of the assessed value of their home.
For others the grants are reduced by $5 for every $1,000 in assessed value above the threshold and will be phased out at a value of $1,164,000, up from $1,064,000 in 2007.
Last year the province also lowered the age of eligibility for property tax deferment from 60 to 55, prompting a record 6,100 deferment applications in 2007, up from the previous record of 4,700 in 2006.
Under the program, the province uses its superior borrowing power to pay the property taxes each year while charging a low rate of simple interest to the homeowner.
Simple interest means the debt grows slowly because instead of paying interest on interest, the annual interest is simply tallied and then added to the final bill which is only due when the home is sold or the last surviving homeowner passes away.
The province is administering more than 19,000 active accounts with an average tax deferment of $12,000.
© The Vancouver Sun 2008
