Property taxes ‘out of sight and out of mind’ for many in Greater Victoria
Increased use of the province’s property tax deferral program by thousands of local homeowners results in unintended consequences such as less scrutiny of municipal government costs, says the advocacy group Grumpy Taxpayer$ of Greater Victoria.
In 2019, 9,896 residential property taxpayers deferred almost $40-million in property taxes in the 13 jurisdictions of the Capital Regional District (CRD), according to a freedom of information request filed with the B.C. Ministry of Finance.
“Tax increases are out of sight and out of mind for many homeowners. When the big bill isn’t payable for 10 or 20 years, or when the property is sold, why bother grumble at your councillor or city hall about excessive taxes?” says Stan Bartlett, chair of Grumpy Taxpayer$.
“The provincial property tax deferral program is an excellent initiative for many seniors and struggling families with dependent children,” says Bartlett, “With unintended consequences, does anyone else have concerns about this program?”
Since 2010 when there were only 5,092 deferrals valued at $16.2 million, the number of deferrals in Greater Victoria has almost doubled and the dollar value has increased by about 250 per cent.
With tax increases in the Capital region usually exceeding inflation by two or three hundred per cent, expensive house prices, and the population aging, it’s expected the tax deferral program will only increase in popularity.
The three largest participants in the program in 2019 were Saanich with 3,123 deferrals ($13.1-million), City of Victoria with 2,024 deferrals ($7.8-million), and Oak Bay with 1,111 deferrals ($6.75-million), according to the B.C. Ministry of Finance.
When seniors and others can defer taxes it gives councils and administrations reason to continue to increase taxes well above inflation year after year.
Of the three levels of taxation in B.C., only one program allows taxpayers to borrow an amount owed on taxes at a sub-prime rate.
“Again, tax deferrals may seem like an act of kindness by government, but results in taxpayer apathy and municipalities continued failure not to get costs under control. Some taxpayers are only able to pay their taxes by effectively getting a lien on their property, and passing the burden onto the next generation with exaggerated costs,” says Bartlett.
The unintended consequences of what is a fundamentally a good program are unfortunate – politicians know there will be less backlash against big tax increases. The increased popularity of the deferral program has eliminated some of the checks and balances critical for effective municipal government.
Many taxpayers defer taxes because they are property-rich, but cash-poor seniors who want to stay in their home. Others, want to take advantage of low-interest money that’s available without a means test. The province underwrites the program, a bill paid for by all taxpayers.
Property tax deferment is available to B.C. homeowners who are 55 years or older, a surviving spouse, or eligible persons with disabilities. Deferment is also available for homeowners who financially support a dependent child.
There is no means test: When you defer your annual property taxes, the province charges simple interest on your tax deferment loan. The loan rate has been increased to 1.95 per cent for the Regular Program and increased to 3.95 per cent for the Families with Children Program. A lien is registered against the property and may impact any line-of-credit application. The deferred taxes and interest are paid when your home is sold or transferred.
Greater Victoria home values mostly dip slightly or stay same in latest assessment, Times Colonist, Jan. 2, 2020.
Interest and fees for property tax deferment, Government of BC, 2019.
Freedom of Information Request, BC Property tax deferment for Capital region jurisdictions, Ministry of Finance 2017-19, Dec. 2019.
Find your property assessment, BC Assessment, 2020.
Available for Media Interviews:
Stan Bartlett, Chair, Grumpy Taxpayer$
John Treleaven, 1st Vice-chair, Grumpy Taxpayer$
250.656.7899, cell 250.588.7899