Real Estate Property Tax Deferment

Property Tax Deferment Programs 2018

If you are a home owner in BC, you have likely received, or will shortly receive, your property tax notice.  The notice provides information including how much your property taxes are, when they are due and how you can claim a home owner grant.

In 2018, the due date for property taxes is July 3. If you fail to pay your taxes by that date, a 5.0% minimum penalty is levied on any amount outstanding.  It should also be noted that some municipalities have increased the penalty. For example, the penalty is 10% in the City of Victoria.

If you qualify and your property meets certain eligibility requirements, you may be able to defer your property taxes. If you choose to defer the taxes, a lien is registered against the title to your property which will remain on title until the amount owing is paid in full. A $60 fee is also charged for the deferral and interest will be charged on the deferred amount.  The interest rates are set every six months by the Minister of Finance and can be found here.

There are two deferral programs: (1) the regular program and (2) the program for families with children.

The Regular Program

You may qualify for the regular program if you are:

  • 55 years of age or older (only one spouse needs to qualify);
  • a surviving spouse, regardless of age (i.e. you have lost your spouse by death and are not the spouse of any other individual); or
  • a person with disabilities.

There are also several other requirements, including but not limited to the following: you must be a Canadian Citizen or permanent resident; you must be a registered owner of the property; you must have and maintain a minimum equity of 25% of the property’s assessed value; and you must have paid all previous year’s property taxes, utility user fees, penalties and interest, if any.

Your property may not qualify for the program in certain circumstances. For instance, your property doesn’t qualify for tax deferment if it’s a second residence such as a summer home or rental home or if you pay the property taxes for the residence to a First Nation.

The Families With Children Program

For the families with children program, you may qualify if you are:

  • a parent;
  • a stepparent; or
  • financially supporting a child or stepchild.

There are also several other requirements, including but not limited to the following: you must be a Canadian citizen or permanent resident; you must be a registered owner of the property; you must have and maintain a minimum equity of 15% of the property’s assessed value; and you must have paid all previous years’ property taxes, utility user fees, penalties and interest.

The same qualifications for the property apply to this program as do for the regular program set out previously.

It can take up to several months for the tax deferment applications to be processed. You may not get a response until after the property tax due date. If the application is received before the property tax due date but is approved after the due date, you may not be charged a late payment penalty.

You may however be charged a late payment penalty if:

  • your application is made after the property tax due date;
  • your application isn’t approved and it is past the property tax due date;
  • you fail to provide the required information;
  • you sell your home before the taxes are paid on your behalf; or
  • if you cancel or withdraw your application for any reason at any time before the taxes are paid.

This is a brief overview of the property tax deferment programs.  If you have further questions for our real estate lawyers please feel free to contact Sitka Law Group. We are located in Victoria, BC, near the border of Saanich and Oak Bay.