The BC government has released their Property tax Deferment Program interest rates, and until September 2016 it is a very affordable 0.70%. This is a lower rate than we had anticipated from the government, which is welcome considering how little is being paid on investments in today’s low interest rate environment. If you are eligible for this program, we do recommend considering it as a way to help improve your current cash flow.
Eligibility is based on the following criteria:
- Be a Canadian citizen or permanent resident who has lived in British Columbia for at least one year prior to applying.
- Be at least 55 years old during that calendar year or a surviving spouse, or a disabled person as defined by BC regulation specifically for this purpose. Only one of a couple needs to meet the age criterion.
- Live in the subject property and have a minimum equity of 25%, based upon assessed values as determined by the BC Assessment Authority. Note a tricky little aspect of this test: Your equity is measured against registered debt on the property, which includes the maximum amount authorized to borrow if you use a line of credit not a conventional mortgage. In other words, the actual amount currently outstanding on such a credit line is not the measure. You may not submit other third party indications of the value of the home.
Additionally, there is a provision for those persons with disabilities, and a program for families with children under the age of 18 (although the interest is higher, at 2.70%). For more information, see our Insight post on this topic.