We’re rolling around to property tax time, and municipalities are about to feel the COVID-19 crunch. The Mayors of Metro Vancouver have been leading an ask of the province to backstop municipal finances given that many residents and businesses may fail to pay their property taxes. Indeed, the City of Vancouver recently commissioned a survey indicating that due to job and income losses, some 25% of home owners in the city would be paying less than half of their 2020 property tax bills.
One ask from the Metro Mayors is for the province to expand it’s property tax deferral program to cover those not currently included. As they advocate:
This, of course, is a big ask! But just how big? Here I want to separate out the ask for businesses and non-profits (where the ask is very big indeed), and focus on homeowners. And after all, homeowners are where the City has focused its survey. So how many homeowners are not currently covered by provincial tax deferment options?
There are two programs covered under provincial tax deferment: the regular program and the program for families with children. The regular program is open to any property owners (of a primary residence) over the age of 55, as well as surviving spouses (of any age) and persons with disabilities. The province effectively puts a lien on your property to secure the debt and charges 1.95% interest on outstanding taxes owed. The families with children program is open to anyone living with or supporting children under age 18, or children enrolled in education (e.g. university), or children with disabilities of any age, and the interest charged under this program (3.95%) is higher.
Just focusing on the two main groups covered, homeowners age 55+ and families with children, we can draw upon census data from 2016 to roughly estimate how many owner-occupied households are likely covered by existing tax deferment options. The answer: the vast majority, over four-in-five. Why? Because home owners are especially likely to be old or have children. Here are owner-occupier households in BC by age of primary maintainer and presence of children*:
Overall this is good news! Most resident homeowners in BC are already covered under property tax deferment options. And the province will likely see a big uptake in deferments this year through existing programs. But those who fail to qualify also deserve provincial attention. And, of course, renters deserve a lot more attention too. I’d argue that it’s also well worth supporting expansion of the property tax deferral program more broadly since this also supports municipal finances at a very trying time. Moreover, if the province expands the program at family program interest rates, it may also help support provincial coffers down the road.
*- Here I lump the relatively tiny set of multiple family households into those without children, following the general household type categorization. See StatCan Table 98-400-X2016226 to play around with your own operationalizations.