Chris Carter
Province
Several months ago, I read with interest when you wrote seniors could defer their property-tax bill. Is there any way to put this tactic to work to boost the value of my estate? The only significant asset I’m passing along to my heirs is my home.
— Elizabeth, New Westminster
Dear Elizabeth:
The provincial property tax deferment program for seniors allows homeowners over 60 (subject to a few conditions) to defer the property-tax bill on their principal residence as long as they live in the home.
Because the interest that is applied against the deferred taxes is relatively low and does not compound, there is a planning opportunity to invest these temporary tax savings in the hope of your investment outpacing the tax liability and the resulting difference being available to boost the value of your estate.
By putting the magic of compound interest to work for you over a longer period, the odds are stacked in your favour for this strategy to succeed.
If your plan is to defer the taxes until death and if you are in good health, another idea worth considering is to take the monthly amount you save on your property-tax payment and use it to buy a life insurance policy.
Providing the insurance costs are reasonable, this can be an effective way to improve the value and the liquidity of your estate. For a couple in good health, the cost of a “last to die” insurance contract is a fraction of the cost of an individual life policy, making this concept all the more feasible.
