Everything you need to know about Property Tax Deferment Program

In British Columbia, the Property Tax Deferment Program is a valuable financial tool for eligible property owners, particularly beneficial for those looking to sell their homes. Here’s a detailed explanation of the benefits, how to participate, apply, and any exemptions associated with the program:

Benefits of the BC Property Tax Deferment Program

1. Cash Flow Management:
   • Deferral of Taxes: The program allows eligible homeowners to defer payment of their annual property taxes, which can significantly ease cash flow, especially for those on fixed incomes or those facing financial challenges.
   • Focus on Immediate Financial Needs: By deferring property taxes, sellers can redirect their financial resources towards immediate needs or investments.
     
     
2. Low-Interest Rate:
   • Affordable Borrowing: The deferred amount accrues interest at a low rate, typically much lower than conventional loans, making it an affordable borrowing option.
     
     
3. No Repayment Until Sale:
   • Flexibility: Deferred taxes do not need to be repaid until the property is sold, ownership is transferred, or the homeowner passes away. This provides significant flexibility and reduces immediate financial pressure.
     
     
4. Continued Eligibility for Homeowner Grants:
   • Grants and Deferment: Homeowners can still qualify for the Home Owner Grant even if they defer their property taxes, further reducing the effective cost.
     
     

Eligibility Criteria

1. Age and Residency:
   • 55 Years or Older: Homeowners must be at least 55 years old, or
   • Surviving Spouse: Be a surviving spouse of any age, or
   • Persons with Disabilities: Eligible individuals with disabilities can also qualify.
     
     
2. Equity Requirement:
   • Home Equity: There must be at least 25% equity in the home based on its assessed value for property tax purposes.
     
     
3. Primary Residence:
   • Principal Residence: The property must be the principal residence of the applicant.
     
     

How to Participate

1. Application Process:
   • Online Application: Homeowners can apply for the program through the eTaxBC online system. This is the most efficient and preferred method.
   • Paper Application: Alternatively, a paper application form can be downloaded, completed, and mailed to the Property Tax Deferment Office.
     
     
2. Required Documents:
   • Proof of Age/Disability: Provide proof of age or disability, if applicable.
   • Homeowner Grant Application: If applicable, submit the Home Owner Grant application alongside the deferment application.
     
     
3. Approval and Annual Renewal:
   • Initial Approval: Once approved, the deferment applies to the current tax year.
   • Annual Renewal: Homeowners must renew their application annually to continue deferring their taxes.
     
     

Exemptions and Considerations

1. Special Circumstances:
   • Home Sale or Transfer: If the home is sold, transferred, or the homeowner passes away, the deferred taxes become due.
   • Equity Change: Significant changes in the home’s equity may affect eligibility for continued deferment.
     
     
2. Interest Accrual:
   • Accrued Interest: While interest rates are low, they do accrue annually. It’s important for homeowners to consider the long-term cost of deferment.
     
     
3. Administrative Fees:
   • Fees: There may be small administrative fees associated with setting up and maintaining the deferment account.
     
     

How to Apply

1. Online via eTaxBC:
   • Access eTaxBC: Visit the eTaxBC website.
   • Create Account: If you do not have an account, you will need to create one.
   • Submit Application: Fill out and submit the property tax deferment application.
     
     
2. Paper Application:
   • Download Forms: Obtain the deferment application form from the BC government website.
   • Complete and Mail: Fill out the form and mail it to the Property Tax Deferment Office along with any required documentation.
     
     

Conclusion

The BC Property Tax Deferment Program offers significant benefits for eligible homeowners, particularly those planning to sell their homes. By deferring property taxes, sellers can manage their cash flow more effectively, take advantage of low-interest borrowing, and remain financially flexible. Participation involves an application process that can be completed online or via paper submission, and it is essential to renew the deferment annually. For more information and to apply, visit the BC Property Tax Deferment Program website.