My late father was often fond of saying that we judge people by what they say and do, but expect others to judge us by our motives.
This was certainly true following my last Courier column on property assessments and the need to reform our property tax system.
As anticipated, the increase in property assessments for many Vancouver single-family properties was considerably higher than the average 16.8 per cent city-wide increase.
It must be emphasized that one’s property tax increase is not equal to their percentage increase in assessment. That is not how the system works.
Rather, an individual’s property tax increase takes into account numerous factors, including Vancouver’s overall property tax increase. This year it is 2.3 per cent.
It is also based on the “mill rate,” which the city calculates by dividing the total amount to be raised from property taxes by the total assessed value of all property, multiplied by 1,000.
Put another way, if your property assessment increase was less than 16.8 per cent, your increase in the city’s portion of property tax will be less than 2.3 per cent. However, if your assessment is greater than 16.8 per cent, the increase in taxes paid to the city will be more than 2.3 per cent.
This will be reflected in your Advanced Tax Bill, which must be paid by Feb. 2.
Knowing that many people would be concerned about property taxes, following the release of the B.C. Assessment data, I tweeted out that those 55 and over and worried about their property taxes, should let Christy Clark pay them on their behalf.
While I admit this was a bit cheeky, my intention was to let people know about the province’s Property Tax Deferral program, which has been in place for decades but generally not well known.
The program provides low interest loans (currently prime less 2 per cent or 0.85 per cent) to assist eligible homeowners such as seniors 55+ and others to pay their annual property tax.
Households can qualify for the program provided they are the registered owner of a principal residence, and a Canadian citizen or permanent resident living in BC for at least one year.
Details of the program can be found here.
I subsequently received a call from a CBC reporter who was not familiar with the program. During our conversation she asked if I deferred my taxes and I responded that indeed I had deferred $60,000 in recent years.
I acknowledged that I did not really need to do this since I could afford to pay my taxes. However, given the very low interest rate and the fact that the program is available to anyone 55 and over regardless of income or assets, I thought it foolish not to.
I told her I invest the money, and have generally received a better return than the interest rate charged by the province.
The next morning I awoke to hear myself on the CBC Early Edition news, and was subsequently approached by other media outlets throughout the day.
While I certainly raised awareness about the program, what I did not expect was the outrage that people like me were somehow exploiting a loophole in the program to make money, while the city was having to do without essential tax dollars to pay for services.
What many did not understand is that municipalities are not losing out; the province pays the property taxes on behalf of those registered in the program. It in turn gets the money back, with interest, usually on the sale of the property.
While many thanked me for letting them know about this program, others were disgusted. It was as if I was taking food from a food bank. They chastised me for threatening the future of a much-needed program, even though I made it clear I was not advocating an end to the program. I just questioned why it was available to anyone 55 or over, without any income or means testing.
Within a few days, the media storm was over. However, I still believe the province should reconsider the terms of the Property Tax Deferral Program. In the meanwhile, if you are worried about paying your taxes, you might want to investigate it before the Feb. 2 deadline.