If you own a home, not only will you have to pay your mortgage, utilities, and home insurance, but there are also property taxes to budget for. And depending on where your home is located, you could be looking at paying a hefty bill every year towards these taxes.
Luckily, there are certain programs available that may allow you to defer your property tax payments to a later date. Given the current economic climate we’re in where many Canadians have lost their jobs due to the ongoing health crisis, any little bit of financial help can go a long way.
More specifically, seniors who are classified as lower-income Canadians may be able to defer their property taxes, depending on where they live and what the criteria are for the programs available to them.
Let’s take a look at property tax deferment programs available to seniors who qualify.
Property taxes are paid on a property and are based on the value of that property, including the land. Each municipality has its own tax rate, which is then applied to the property value and paid by its owner. Property assessors will assess the value of local properties, and that value is what is used to calculate property taxes against the local tax rate.
Property taxes are typically calculated on an annual basis. These taxes are then collected and used by the local government to cover the cost of law enforcement, schools, road construction and maintenance, sewers, parks, and so forth.
Deferring your property taxes simply means paying them at a later date after they were initially due. This can give you more time to get your finances in order so that you have the funds available at a later time to pay your property taxes. In exchange for this service, you will have to pay interest on the deferred amount. The rate paid will depend on where you are located.
The rules may differ from one province to the next. In Ontario, for instance, tax-deferral programs exist for low-income seniors 65 years of age and over and those with disabilities. Homeowners must pay the base amount and may be qualified for partial or full property tax deferral, depending on the location of the property.
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The following property tax deferment programs are available for eligible Canadians across the country.
The Property Tax Deferral Program for seniors in Alberta allows homeowners who qualify to voluntarily defer their property taxes, whether in full or partial. The deferral can be done through a low-interest home equity loan from the Alberta government. Right now, the interest rate is 2.45%, which is reviewed and may be adjusted every 6 months.
The property taxes will then be directly paid to the local municipality from the Seniors Property Tax Deferral Program. With this program, a caveat will be placed against the land title certificate to secure the home equity loan.
The loan can be repaid at any time, and no monthly payments are required. That said, the loan will automatically come due when you sell your home, you’re no longer an owner, or the home is no longer considered your primary residence.
In order to qualify for this program, you must meet the following criteria:
The BC tax deferment program is a low-interest loan program that helps homeowners pay their property taxes. In this province, there are 2 programs to take advantage of:
To qualify for the regular tax deferral program in BC, you must meet the following criteria:
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This program is designed for parents, stepparents, or caregivers who are financially supporting a child. To be eligible for this program, you must meet the following qualifications:
For both programs, the home and your equity within the home must also meet certain criteria:
In Ontario, low-income seniors and people with disabilities may be eligible for a deferral of provincial land tax and education tax, which is applied to the tax increase in the current year.
In order to qualify for this program, you must meet the following criteria:
In order to apply for the program, you must provide proof of your age and receipt of a benefit paid under the guaranteed income supplement. Or if you are a person with disabilities, you must provide proof of receipt of your benefit paid under the Ontario disability support program.
Residents of Halifax have a few options when it comes to deferring their property taxes:
Rebate. The city will pay part of your property taxes if your household income is under $35,000.
Rebate and a deferral. You may hold off on paying the rest of the current year’s property taxes after the rebate has been applied to your tax account. You will be charged interest on the deferred amount, which is Prime -2% for people in the program and Prime +2% for those who didn’t reapply.
Deferral of local improvement charges. You may have a lien placed against your property in the form of local improvement charges for services including water, sewer, or road work. The charges are paid once per year and can be paid as part of a payment plan.
Payment plan. Instead of making 2 big payments, you can pay in smaller amounts on a monthly basis.
Seniors who reside in New Brunswick can have their annual increase in property taxes on their primary home deferred. In exchange, a lien will be placed on the property and will have to be repaid when the home is either sold or title is transferred. The Finance and Treasury Board will keep a tally of the total amount in deferred taxes and interest that is owed every year.
In order to be eligible for the program, applicants must meet the following criteria:
Eligible seniors in the province of Manitoba have the opportunity to enter into an agreement with the government to defer property and school taxes on their homes. With this program, the government will pay the property taxes on behalf of seniors.
Seniors will then owe the amount deferred to the government by way of a lien placed against the property. The debt will incur interest at a rate of no more than 1% over the government’s borrowing rate.
In order to be eligible for the program, seniors must meet the following criteria:
Property taxes can add to the already high costs of owning a home. But with property tax deferral programs available in provinces across Canada, seniors who qualify may be able to put off paying these taxes until a later date when finances are more readily available.
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Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.
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