Sunday, January 10, 2016

BC Property Tax Deferral Program

From CBC files Maggie Gallagher photo
My late father was often fond of saying that we judge people by what they say and do, but we expect others to judge us by our motives.

This was certainly true this past week when I seemed to create a media storm over the province's property tax deferral program. Details on this program, which has been in place for decades, can be found here

From my experience, the program is not well known. Consequently, following the release of the 2016 property assessments which revealed an average increase of approximately 11% across the province, and 16.8% increase in Vancouver, with many single family properties in the 15% to 30% range, I tweeted out that if homeowners were concerned about paying their taxes, they should let Christy Clark pay them for them. I provided a link to the provincial program.

I had a call from a CBC reporter who wasn't familiar with the program. During the conversation she asked if I took advantage of it. I told her I did, and seeing the latest statement from the province on my desk, noted I had deferred $60,000 in taxes over the past 6 years. I acknowledged that I didn't really need to do this since I could afford to pay my taxes, but given the low interest rate (2% below prime) and the fact that the program is open to anyone 55+ (as well as others), I thought it foolish not to. In my case, I invest the money, and generally have achieved a better return than the current 0.85% interest rate charged.

I was surprised to learn the next morning that my interview made the CBC Early Edition news.

While I certainly achieved my intention of raising awareness about the program, the story line that I didn't expect was the outrage that people like me, who are not necessarily low-income, or without means, are using the program.

I subsequently did interviews with Global TV, various radio stations, including an appearance on the Linda Steele show on CKNW, and received considerable feedback. Many did not seem to understand that municipalities were not losing out-the province pays them the taxes on my behalf- and the province does get the money back on the sale of the property, or at anytime beforehand.

Many people were disgusted with me. It was if I was taking food from the foodbank. They chastised me for threatening the future of a much-needed program, even though I made it clear I was not advocating an end to the program.

However, others agreed that it made sense to take advantage of the program. Indeed, it was foolish not to, especially when the interest rate was so low. (While I didn't promote this, it would even make sense for someone to use the money to pay down their mortgage, which would be at a higher rate.)

The Minister of Finance was asked to comment, and he indicated that perhaps the province will reconsider the terms of the program.

By Thursday the story was over. However, I do believe that the province should reconsider the program terms. I also think it's time to have a broader conversation about whether those 55+ or 65+ still deserve the special concessions offered by our society, whether it is tax deferral or cheaper cinema tickets. But that's another story for another day. 

1 comment:

laxmi said...

Having solid experience in the real estate market, Sivani
Developers in Visakhapatnam presents a wide choice of
Residential, Industrial, Commercial, Recreational and
Institutional properties to its clients.