If you or your ageing parents are feeling “house rich and cash poor”, The British Columbia Property Tax Deferment Program may provide some relief.
This program gives home owners who are 55+ the option to defer their property taxes on their home until they die or sell the home. The interest rate on the unpaid balance is 1% per year.
This means it would only cost $50 per year to defer $5000 in property taxes. By comparison, carrying the same amount of money on a credit card would cost around $1000 per year, while a line of credit at 4% would cost $200 per year in interest.
Because there is no “means test” in BC, many wealthy home owners choose to invest their property tax money with the expectation that they will earn more than the 1% they are paying.
Some home owners relish the opportunity to legally delay giving their money to the government for as long as possible. But deferring property taxes is certainly not for everyone.
Some people are opposed to “borrowing” money, even if the cost is low. The program also requires a form to be submitted every year to keep it in place.
The ideal candidate is a 55+ home owner who wants to remain in their home for many years, could benefit from having a few thousand extra dollars to spend, and does not mind reducing the amount of equity from their home that is left to beneficiaries.
For more information about how this program works, feel free to call me, contact your city hall, or send an email to: email@example.com.