How to Defer Property Taxes?
Many homeowners are finding it difficult to meet the rising cost of living in the lower mainland. When you defer property taxes you can manage expenses in the upcoming year! Try using this program to pay back some high-interest debt and catch up temporarily.
Qualified BC residents may defer property taxes annually, into a low-interest loan (prime rate -2%) or (prime rate). This loan allows eligible BC homeowners to help delay their yearly property taxes on their principal residence. There are two programs that you can qualify for:
- Regular Program
- Families with Children Program
Regular Program Qualifications
Sometimes tricky times occur & the bills start to accumulate, the last thing you’d want to think about is losing your home due to merely missing a few payments to property tax. The regular program mostly helps property owners in three categories: adults aged 55 or older, widowers of any age, and person(s) with disabilities.
For more information here
Families with Children Program Qualifications
You may defer property taxes if you have children. If you are a permanent resident of Canada and are the registered owner of the property you can apply. You’ll need to have lived in BC at least one year before applying & have paid up all prior years property taxes for the residence. The rate for this deferral is at prime rate or 3.20% (currently July 11, 2018.)
Here’s a summary of what the homeowner needs to qualify for the families with children defer property taxes program:
- have lived in BC at least one year before applying
- be the registered owner of the property
- lived in BC at least one year before applying
- pay property taxes for the municipality or the province
- paid all previous years property taxes for the residence
Parents with Children Can Defer Property Taxes Under Specific Cases
A parent, who is a homeowner, can defer property taxes under specific cases. If your child is under 18 and living with you either full/part-time you can apply. If they don’t live with you but you pay support for the child then this program can apply to you. Parents with a child/ stepchild who is an attending university/college you may also apply. If your child/stepchild is designated as a person with disabilities (under the EAPDA) or has a severe mental/physical impairment for an extended period, may also apply.
- any child who is under the age of 18 & living with you full-time or part-time or who doesn’t live with you but you pay support for the child, or
- if your own child or stepchild of any age that is attending an educational institution (i.e., university or college), or
- your own child or stepchild of any age who is designated as a person with disabilities under the Employment & Assistance for Persons with Disabilities Act, or
- your child/stepchild of any age that, in the opinion of a physician, has a severe mental or physical impairment that:
- is likely to continue for at least two years
- directly & significantly restricts their ability to perform daily living activities, either continuously or periodically for extended periods, and
- as a result of those restrictions, they require an assistive device, the significant help or supervision of another person, or the services of an assistance animal to help perform those activities
How Defer Property Taxes Affects Home Equity?
By using this program, you place a lien on your home. The lien is held by the Government of Canada. You must have been able to maintain a percentage of the property’s assessed value. You need [25% equity for the Regular Program] & [15% for the Families with Children Program.] If you cannot qualify because of the equity requirements and you need to pay bills over $10k then try another debt relief strategy.
The defer property taxes program does not show up on your credit bureau. It will likely not affect your ability to apply for for credit cards and some loans. If you expect to be using your home equity in the future, then this strategy may not work for you. The banks prefer to be the first lender on property so it may be difficult to receive a 2nd mortgage or refinancing agreement through A type lenders. For more information about equity
To learn how this program can be used to build your estate contact us to find out more.