In the Okanagan, property taxes payable to the applicable taxation authority (city, district, municipality, etc.) are due in the middle of the year (generally, early July) for the entire calendar year. Annual property tax notices are sent out every May, which set out the amount of that year’s taxes and how they can be paid. However, the provincial government offers certain B.C. homeowners the option to defer their annual property taxes on their principal residence.
In order to qualify for a property tax deferment program, you must qualify for one of the two programs that are available. These are:
- Regular Program. You may qualify for the regular tax deferment program if you are:
- 55 or older during the current year;
- a surviving spouse of any age; or
- a person with disabilities. Find out more details about the regular tax deferment program here: https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/defer-taxes/regular-program
- Families with Children Program. You may qualify for the Families with Children Program if you are a parent, stepparent, or financially supporting a child. More details of that program can be found here: https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/defer-taxes/families-children-program
In order to apply for a property tax deferment program, your property taxes must be up to date. Any taxes owing from previous years, penalties, or interest must be paid in full before you apply to defer your property taxes.
To apply, you can send a completed application to your property tax office at the address shown on your property tax notice that you receive in May. The applicable taxation authority will complete their portion of the application, then send it to the Province for processing. While the provincial government processes your application, they may reach out to you for additional information. Note however that the government may take several months to process applications. In the event that the government finds you are not eligible for deferment after the property taxes have become due, you may be charged a late payment penalty on unpaid taxes.
Once you are approved for tax deferment, the provincial government will pay your annual property taxes for you on your behalf. They will also place a restrictive lien on the title of your property. This lien restricts dealings with the property, such as selling the property. If you are selling a property that is in the tax deferment program, your lawyer will order a payout statement from the Province, which will show the balance of the tax deferment loan. They will then pay, out of the sale proceeds, the total amount owing in order to discharge the restrictive lien on your behalf, much like they would if payout out and discharging your mortgage.
Certain title changes can be made while a property is in the tax deferment program. This includes a transmission of the property to a surviving joint tenant, changing your name on title, or transferring between owners where the same owners are on title before and after the transfer.
You can repay all or part of your tax deferment loan balance at any time, without penalty. Once taxes have been paid in full, the Province will send a Notice of Satisfaction to the Land Title Office indicating that all property taxes have been paid, and the Land Title Office will release the restrictive lien.
Interest will also be charged on the deferred tax amount (1.95% for the regular program, and 3.95% for the families with children program). You must complete a renewal application each year if you would like to continue to defer your annual property taxes.
An additional consideration is that you should contact your lender prior to applying for a tax deferment program in order to ensure that the program will not conflict with the terms of your loan.
Author: Jane Otterstrom
This information is general in nature only. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your legal needs, please contact our office at (250)448-2637 or any of our lawyers practicing in the area of real estate law at the following:Una Kuzio: firstname.lastname@example.org Jane Otterstrom: email@example.com