Vancouver architect says the wealthy are cashing in on property tax deferment
The provincial government has loaned out more than $822 million as part of a program that helps seniors and families pay their property taxes.
But there are questions about whether some are cashing in on ultra-low interest rates, and whether the program is effective housing policy.
Under B.C.’s property tax deferment program, owners over the age of 55, who have a deceased spouse or are a person with disabilities, can defer their taxes; the province pays them instead, and owners are charged an interest rate of 0.7 per cent.
People who don’t meet those criteria but have children or are under financial hardship can also apply for the program, but pay an interest rate of 2.7 per cent.
Almost $168 million of the money loaned out so far was for taxes due in the last financial year.
Vancouver architect and real estate consultant Michael Geller argues the program amounts to a low interest loan, and that for many seniors facing financial hardship it can be a lifeline.
But he said some seniors, including himself, who don’t actually need the program are making use of it to access rock bottom interest rates.
“It actually came up over dinner in a Shaughnessy home Saturday night when a number of the other people were saying they were thinking of taking advantage of this program,” he said.
“One of them said she didn’t want to because she thought it was wrong that the city would have to struggle without the payment, until I pointed out the city gets the money. It’s getting it from the provincial government.”
CKNW has reached out to the ministry of finance and ministry of housing for comment.
WATCH: Coverage of B.C. property taxes
Geller told CKNW in 2016 that the deferment program had allowed him to save and invest an additional $60,000 over six years.
Gellar said because the program isn’t means tested, high-income seniors are able to take advantage of what amounts to a loan at a much better interest rate than a family in need.
“It’s a sad irony that I can take advantage of this program at a lower interest rate than a low-income family. That just simply doesn’t make sense.”
He adds B.C.’s program is particularly worthy of scrutiny, given initiatives in other jurisdictions like the U.K. that encourage seniors to downsize.
“It’s ironic that in England the government is doing the exact opposite. It’s got programs in place to encourage singles, older people to move out of their homes rather than stay in those homes.”
Geller said he doesn’t think the program should be scrapped, just rethought.
He added that he believes demand for the program will only climb as more people learn about the low interest rates.
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