Dear BC Clients,

We wanted to flag an important change in BC for homeowners over 55.

The BC Deferred Property Tax Program, a previously low-cost way to manage cash flow – is becoming meaningfully more expensive.

How The Program Works

B.C.’s Property Tax Deferment Program is a provincial program that lets eligible homeowners delay paying their annual property taxes by turning them into a low-interest loan from the government. The Province of British Columbia pays your property tax bill to your municipality on your behalf. The amount becomes a loan secured against your home (a lien is placed on the title).

Through this plan, you don’t have to make payments ever. The lien balance just grows and is deferred until you:

• Sell the home
• Refinance
• Transfer ownership

Think of it as borrowing against your home equity to cover property taxes.

To be eligible, you must be one of:

• 55+ years old
• A surviving spouse
• A person with a disability
• A homeowner supporting dependent children (the program is slightly different in this case)

What’s Changed:

Previous structure:
Interest rates were typically Prime – 2%. This meant the rate was 2.95% for 2025. Interest was simple and not compounding.

New reality (Budget changes):
The new BC budget changes this significantly. Interest rates are moving to Prime + 2% (6.45%).
Interest is now compounded monthly.

Here’s a simple example:
 
Let’s look at a homeowner deferring $10,000 per year of property taxes:

Before (Lower Rate Environment 2.5% simple/low compounding effect):
– After 5 years $53,750 total balance

Now (6.45% compounded monthly):
– After 5 years $60,890 total balance

That’s a $7,140 difference on just $50,000 of deferred taxes

Why This Matters:

For years, this program was viewed as a low-cost liquidity tool – An easy “set it and forget it” financial strategy

That’s no longer the case. Today, it behaves much more like a moderate-cost borrowing strategy, one that compounds faster. The interest rates are much less appealing than they used to be.

Many people saw the old program a “no brainer” because the roughly 2.95% rate charged was likely less than you were making on your investments. So it made sense to defer your property taxes and avoid taking from your investments to pay them annually.

Before, It was a cheap, low risk borrowing strategy. Now, many people may think “Is it worth borrowing at approximately 7% and compounding debt against my home?”

– Matthew