If you’re considering it, here are eight things to know about how property tax deferment works in B.C.:The B.C. government offers property tax deferrals for those who need or want to delay payment, by providing a low-interest loan on taxes owed on a principal residence. The Ministry of Finance pays the taxes to the municipality in lieu of the homeowner. In most cases, the deferred bill plus interest is paid back when the owner sells.
Also eligible are surviving spouses of any age, people with disabilities, and in some cases a parent who is financially supporting a dependent child.The standard interest rate on a deferral loan is prime minus two per cent, so it’s a highly favourable rate. Until Sept. 30, 2023, that means simple interest of 4.45 per cent will apply to the loan.— so this year it’s 6.45 per cent.For those applying for the first time, the application window is from early May through Dec. 31.
If you’ve previously deferred property taxes, you can apply to renew any time after May 1 once you receive your tax notice.The idea behind deferral is that, as property values rise and taxes along with that, seniors are able to stay in their homes for longer, or parents can provide for their kids. “You have to pay the money anyhow,” says Mackenzie, whether that means handing over the taxes now or paying them when your home sells. “It’s the absolute cheapest money you’ll ever be able to borrow.”One prerequisite of deferment is that you must maintain at least a 25 per cent equity in the assessed value of your home. That includes any loans you take out against your mortgage and all other charges against the property.