The provincial government announced January 10 that people who own homes with values that fall below $1.6 million can receive an annual homeowner’s grant worth several hundred dollars.
The government said it will raise the homeowner’s grant threshold from $1.2 million to $1.6 million, which is a response to owners worried about losing hundreds of dollars in grant money to offset property taxes.
Property assessments released earlier this month showed property value increases – from Squamish to Chilliwack – ranging from 30 to 50 per cent, putting the value of many homes above last year’s $1.2 million threshold to qualify for a homeowner’s grant.
The move by government means that 91 per cent of homes in British Columbia will qualify for a homeowner’s grant of up to $570, with that financial break reaching up to $770 for homes in northern and rural areas. About 83 per cent of homes in Metro Vancouver fall below the $1.6 million threshold.
Finance Minister Michael de Jong was scheduled to address media later Tuesday, but in a morning press release said the 33 per cent increase to the threshold is the government’s way of doing its part “to help keep housing costs affordable for families.”
The minister made a pointed remark that municipalities also have a part to play in addressing the province’s affordability crisis – a point made repeatedly by Premier Christy Clark, who has criticized some municipalities for the high cost of development fees, slow development permit approvals and the lack of housing supply.
“Local governments can also work to keep property taxes at a manageable level for residents by controlling their spending and reigning in the amount of revenue they need to operate,” de Jong said.
David Eby, NDP MLA for Vancouver-Point Grey and his party’s housing critic, said he was startled the threshold was so low for so long, noting it was at $1.1 million in 2014, despite the skyrocketing price of real estate in the province.
“The only surprise to me was it took so long for the government to do this,” Eby told the Courier. “But, clearly, when people started to receive their [property value] assessments, and started calling their MLAs during an election year, that wasn’t going to be feasible.”
The ruling Liberals are heading into an election campaign, where the province’s affordability crisis is expected to be one of the main issues on voters’ minds as they head to the polls in May.
While Eby acknowledged a grant of $570 to offset property taxes on residential properties assessed at more than $1 million may seem like small change for some homeowners, the reality is that selling a property in Vancouver to buy another doesn’t get a person any further ahead.
Many homeowners have also leveraged themselves to the point where the homeowner’s grant could be a breaking point, he said, adding that selling to rent is also problematic, with the rental vacancy rate at below one per cent.
“Sure, you can sell your house, but where are you going to go?” Eby said. “It’s a nice idea that maybe you could borrow against the value of your house, but every economist is saying that our housing market is due for a correction. So you could find yourself under water in a hurry.”
The provincial government is projected to spend $821 million on homeowner grants in 2017-2018, compared to $809 million in 2016-2017. The government reimburses municipalities for the full cost of the grants to ensure municipal revenues are not affected. The minister said the government is able to increase the threshold to $1.6 million because of the strength of B.C.’s economy.
Additional grants are available to homeowners who are 65 and older, or who qualify under the person with disabilities category, or who are a surviving spouse of a veteran who received certain war veteran allowances.
In some cases, the grants can reduce property taxes by up to $845, or $1,045, if the home is located in a northern or rural area. Low-income homeowners can also apply for supplements. Deferring property taxes via a low-interest loan program is another option for some homeowners, the government said.