Throne speech promises a property tax deferral for seniors

The Saskatchewan government promised a property tax deferral for seniors during Wednesday’s throne speech.

“A lot of time in Regina, I can’t speak for other cities, we hear of the hardships that seniors have in their retirement,” Mayor Michael Fougere said on Wednesday.

“So you can defer taxes until you sell your home. This is a very positive thing and we’re very happy to hear that.”

Saskatchewan seniors with household incomes under $70,000 will be able to defer the education portion of property taxes on their home.

“For many older adults they are property rich and cash poor,” Saskatchewan Seniors Mechanism Executive Director Holly Schick said. “So this actually has potential to allow older adults to stay in their own homes longer.”

Seniors will have to pay those taxes back, plus interest, when they sell their home.

“It’s definitely something that they won’t be able to get without an interest charge on it, so it’s more like a loan that they don’t have to repay until they sell the house,” Virtus Group Tax Partner Laurie Hudema said.

Other provinces already have similar tax deferral programs for seniors, including British Columbia, Alberta and Ontario. Saskatoon also has a property tax deferral program for everything but the education component.

Officials say the property tax deferral is beneficial in certain situations, and they caution it’s important to know what you’re signing up for.

“It shouldn’t be a decision that’s taken lightly, it shouldn’t be an automatic sign up for this because you don’t realize how fast it’s going to accumulate. Ten years of property taxes plus interest could be 50, 60, 70 thousand dollars all of a sudden,” Hudema said.

“And nowadays there’s no guarantee that housing prices will increase to compensate for that to compensate for that increase,” she added, noting that seniors should consult with their family or a financial advisor.

“So they might lose some equity when they go to sell down the road. If they’re thinking of getting $100,000 out, maybe they won’t get that $100,000 they thought they could, which they may need if they’re moving into a seniors home or wherever they’re going next.”