Isn’t it nice when you can get one government to pay the other government’s taxes?
Most people know about the option to defer your property taxes if you are over 55 in BC. That program is more or less a no brainer (shockingly, only 2.5% of BC’s seniors take advantage of this). Why pay several thousand dollars a year in taxes when you can borrow the money essentially for free and then stick your heirs with the bill? It works like this:
- Apply for the deferral before your taxes are due (one time $60 fee).
- When approved, the province will pay your municipal taxes on your behalf, charging you 0.7% simple interest on the loan.
- They put a restrictive lien on your house which means you have to pay the balance of the loan when you sell.
- Every year you apply to renew the deferral.
Easy peasy. Apply here.
But what if you’re one of those rare people in Victoria not over 55 years old? Well turns out you can also avoid those pesky taxes as long as you have kids.
In that case the interest rate isn’t quite as generous at 2.7%, but still low. Meanwhile a simple set of balanced low cost index funds have returned around 7% in the last 20 years. If you’re the type to invest your money rather than pay down the mortgage, why not also defer those taxes and invest the difference?
Let’s take an example family that has bought a house in the core for $800,000. Property taxes are about $5000 annually. Let’s say they have a couple kids, a couple years apart and thus they qualify for 20 years of tax deferral which they immediately invest.
So this hypothetical couple might end with an extra $90,000* to send their rugrats to college.
*blah blah it’s a lower yield world, blah blah past performance not indicative of future performance YMMV
What do you think? Am I missing something? Is the family program worth taking advantage of?
Do you defer your municipal property taxes?
- No, but I qualify under the family program (41%, 33 Votes)
- No, don't qualify (34%, 27 Votes)
- No, but I qualify under the regular (over 55) program (16%, 13 Votes)
- Yes, under the family program (5%, 4 Votes)
- Yes, under the regular program (over 55 years old) (4%, 3 Votes)
Total Voters: 80