Tax break to counter rising value of homes
Homeowners who have seen their properties rise in value substantially are getting a break from the government when it comes to paying their taxes.
The province has announced it is increasing the home owner grant threshold to $1.6 million from $1.2 million, meaning owners of properties valued up to that amount will be able to claim the basic $570 grant for a principal residence or $770 if the home is in a rural or northern area. Seniors can claim a larger grant of $845 for a principal residence or $1,045 if the property is in a rural or northern area.
Premier Christie Clark, MLA for Westside-Kelowna, said Tuesday morning, the move will keep the percentage of property owners eligible to claim the grant at 91 per cent.
The move is in response to large assessment increases this year across the province.
In the Central Okanagan, assessments for 2017 jumped 20 to 30 per cent. In the Lower Mainland, where house prices are some of the highest in the country, assessment increases were even higher.
The province is projected to spend $821 million on home owner grants in
2017-18, compared to an estimated $809 million in 2016-17. The province
reimburses municipalities for the full cost of the home owner grant to ensure municipal revenues are not affected.
“The threshold increase to $1.6 million helps ensure virtually everyone who received the grant last year will also receive it in 2017,” said Finance Minister Mike de Jong.
Both he and Clark said the strength of the province’s economy is allowing the government to raise the grant threshold.
For properties assessed above the threshold, the grant is reduced by $5 for every $1,000 of assessed value in excess of the threshold.
Low-income home owners who would have received the additional home owner
grant can apply for a low-income supplement, which replaces any reduction in the grant caused by having a property valued over the threshold. The low-income supplement is available to qualifying seniors, certain veterans or their surviving spouse and persons with disabilities.
Property tax deferment is another option that can help make home ownership more affordable. Property tax deferment is a low-interest loan program that allows qualifying B.C. home owners to use the equity in their homes to defer payment of their annual property taxes. Qualifying home owners can defer all, or a portion of, the annual property taxes on their principal residence.
The home owner grant threshold has risen in recent years—$1.2 million in 2016, and $1.1 million in 2015—after being lowered in 2014 to $1.1 million from $1.295 million in 2013. Between 2010 and 2013 it rose from $1.05 million to $1.285 million.
