Frequently Asked Questions
Questions:
Answers:
What types of homes qualify for Property Tax Deferment? |
A homeowner's principal residence qualifies for property tax deferment if the owner has sufficient equity. Please refer to the Equity page on this website for more details on how equity is calculated. A principal residence is the place where you live and conduct your daily activities. Second residences, such as summer cottages or rental properties, do not qualify.
What assessment value will be used for the equity calculation? |
We use the current year assessment value determined by BC Assessment, and do not use other third party real estate appraisals. Only the assessed value for the residential (class 01) or residential/farm (01/09) portion of your principal residence is considered when determining the equity.
What tax amounts can and cannot be deferred? |
Current year taxes, paid to the province or to a municipality, assessed on the residential (class 01) or farm/residential (Class 01/09), portion of your principal residence after deduction of the Home Owner Grant (if applicable) can be deferred. Taxes include property value taxes, parcel taxes and local service taxes (as defined in Division 3, 4 and 5 of Part 7 of the Community Charter).
Property taxes paid to a First Nation cannot be deferred under this program.
Delinquent taxes or taxes in arrears, late payment penalties, interest, or utility user fees cannot be deferred. These amounts must be paid to your taxing authority prior to applying to defer eligible taxes.
What are utility user fees? |
Utility user fees are fees charged for the use of a utility, such as water, sewer, garbage, and recycling. These fees are usually based on consumption of the utility service (such as how much water did you use) and may include a fixed charge. Utility user fees are usually billed separately from your property taxes (although unpaid utility fees may appear on the property tax notice as a separate charge). Utility fees cannot be deferred.
A property tax is based on the value or some other characteristic of the property, and differs from a fee that is based on the level of services used.
A utility fee for the use of the service should not be confused with a property tax relating to the provision of the infrastructure required for the service. The tax for the building and borrowing costs of the infrastructure can be deferred; the fees charged based on the use of the utility service cannot be deferred.
How long can I defer my property taxes? |
You can defer your property taxes as long as you own and live in your home. You can defer future year's taxes if you maintain the minimum equity requirements and continue to qualify for the program.
The deferment account must be fully repaid before you can sell or otherwise legally transfer your home to a new owner, except directly to your spouse.
The account must also be repaid in full upon the death of the agreement holder(s) unless the agreement is transferred to an eligible spouse.
If you want to refinance your home, your mortgage holder may require full repayment of the deferred taxes before approving the financing. The Tax Deferment Office will not grant priorities to financial institutions to place their charge ahead of the tax deferment lien.
Can I obtain financing or refinancing after I defer my taxes? |
Most financial institutions do not approve financing if there is a property tax deferment lien on the property. If you are considering applying for financing we recommend you contact your financial institution prior to applying for tax deferment to confirm their policies in this regard.
The Tax Deferment Office will not grant priorities to financial institutions to place their charge ahead of the tax deferment lien.
I forgot to send my application before the property tax due date. Can I still apply? |
You can apply until December 31 of the current year. However, penalties will apply if the application is submitted after the property tax due date. Interest may also be payable in some jurisdictions. Penalties and interest must be paid before you apply, as these amounts cannot be deferred.
Can I defer property taxes on a leased property? |
Effective for the 2012 tax year, leased property does not qualify for the Tax Deferment Program. However, if you lease property and are currently approved under the Tax Deferment Program, you may continue to defer your property taxes.
What charges can impact the equity in my property? |
All charges registered in the Land Title or Personal Property Registries that have a financial impact to the property are taken into consideration when determining equity for the purposes of tax deferment. These charges include, but are not limited to, mortgages, lines of credit, child and spousal support charges. The upper limits of these charges are used when calculating equity.
Can I defer my taxes if I rent out part of my home or run a small business from my home? |
The amount of tax you can defer is based on the BC Assessment classification. . Taxes assessed on your principal residence that are Class 01 (residential) and Class 01/09 (residential/farm) are deemed to be eligible property for the purpose of tax deferment.
If the BC Assessment classification for your principal residence is Class 01 (residential) and Class 06 (business) the Class 01 portion can be deferred and the Class 06 portion must be paid to your taxing authority prior to applying to defer the Class 01 portion.
If my principle residence is registered in trust can I defer my taxes? |
Eligible property held entirely in trust does not qualify for the Tax Deferment Program. Eligible property held partially in trust may or may not qualify for tax deferment. If your property is partially registered in trust, please contact the Property Tax Deferment Office prior to applying to discuss if your property qualifies.
If it is determined that the trust agreement does not prevent all of the taxes from being deferred, you will be required to complete and submit an application form in order for this office to determine if all the qualifications are met.
Is a current fire insurance policy on my home required? |
If your home is covered by a current fire insurance policy, your equity will be calculated using the full BC Assessment value. If your home is not covered by a current fire insurance policy, the value of the uninsured home will not be included in the equity calculation. This means that your equity will be calculated using the reduced value of the property (i.e. only the assessed value of the residential land will be used).
If you have a question that is not answered here, please contact the Property Tax Deferment Office
Last Revised: March 2012
|
