Grant thresholds over the years
On January 10th, 2017, the B.C. government announced an increase to the homeowner grant threshold by 33% to $1.6 million in an effort to “keep property taxes affordable for families.” As residential real estate prices continue to rise in Metro Vancouver, this measure aims to offset increased property taxes associated with increased property value.
This initiative is projected to cost the province $821 million in 2017-2018, compared to the estimated $809 million in 2016-2017.
As a point of reference, home owner grant thresholds in recent years were as follows:
- 2016: $1.2 M
- 2015: $1.1 M
- 2014: $1.1 M (threshold lowered as a cost-savings measure)
- 2013: $1.295 M
- 2012: $1.285 M
- 2011: $1.15 M
- 2010: $1.05 M
At a glance, it is easy to see that the 33% increase is significant compared to previous years. The government notes that,
“decisions about the thresholds are based on BC Assessment data and are made in the context of setting priorities within a balanced budget”. Further, Finance Minister Michael de Jong explained, “The threshold increase to $1.6 million helps ensure virtually everyone who received the grant last year will also receive it in 2017. The strength of the Province’s economy and sound fiscal management have put us in a position to raise the threshold by such a large amount this year to help home owners.”
The grant is reduced by $5 for each $1,000 of assessed value over $1,600,000, meaning that properties assessed over $1,769,000 ($1,809,000 in northern and rural areas) will not receive any grant.
Provincial and municipal effects
Under the new initiative, 91% of homes in the province (and 83% of homes in Metro Vancouver) will remain below the threshold and, if eligible, their owners will receive the full grant amount. The basic homeowner grant can mean a reduction in residential property taxes on an owner’s principal residence by up to $570, or if the home is located in a northern and rural area, up to $770. An additional grant is available to homeowners over 65 years of age, or who qualify under the persons-with-disabilities category, or who are the surviving spouse of a veteran who received certain war-veteran allowances. This can reduce residential property taxes by up to a total of $845, or if the home is located in a northern and rural area, up to $1,045. In order to qualify, homeowners must be Canadian citizens or permanent residents of Canada who live in B.C.
Property tax deferment
Another option to increase affordability for home ownership is property tax deferment. This is a low-interest loan program that allows qualifying B.C. homeowners to use the equity in their homes to defer payment of their annual property taxes. There are two programs available; the Regular Program and the Families with Children Program. Under the former, the applicant must be 55 or older; or a surviving spouse of any age; or a person with a disability. Under the later, the applicant must be a parent, stepparent or financing supporting a child.