Defer taxes, make money: The new way to profit on Vancouver real estate
Cash poor boomer or pre-boomer? Stop paying your property taxes.
A Vancouver planner and developer says the B.C property tax deferral program is allowing wealthy home owners to make even more money.
Michael Geller also admits he's first in line to take advantage of the situation.
"Most people can invest the money and get a better return," Geller told CBC.
"A lot of people I know take advantage of this program even though they have the money to pay their taxes because the current interest rate is 0.85 per cent."
Geller says he's deferred all his Vancouver property taxes over the last six years — about $60,000.
People 55 or older — those younger can qualify under a higher interest rate program — can apply to defer property tax on a principal residence at the 0.85 per cent simple (non-compounding) interest rate until the time the property is sold.
That means at the current rate, a property tax bill of $6,000 will translate to an interest charge of $51 annually.
More than 36-thousand people took advantage of the program last year. There is no financial means test to determine whether or not an applicant has the ability to pay the taxes.
The deferral program was put in place to cushion those on a fixed income who want to stay in their homes but can't afford the property tax, which is linked to Vancouver's ever increasing real estate prices. Because there is no means test, the main hurdle to using the program is age.
NDP MLA David Eby says in his toney Vancouver/Point Grey riding, there are many older home owners who use the deferral program.
"There are a lot of people who bought homes a while ago, have had the home value increase around them, and are facing huge property tax bills that have no relationship to the income that they earn," he said.
Eby says the program offers homeowners a short-term option, but does not address the greater housing crisis issue in the region.
With files from Chantelle Bellrichard