The province\u2019s property tax deferment program is changing its formula starting in July, which would result in higher interest for homeowners using the program.<\/p>\n
Myrna and Dave Rouse have to make a decision soon. The couple owns their home and has been participating in B.C.\u2019s property tax deferment program<\/a> for the last five years.<\/p>\n The loan program allows eligible homeowners to defer paying their annual property taxes until a later date, with interest accrued.<\/p>\n \u201cIt enables us to stay healthy, because we can stay more active doing things,\u201d said Dave Rouse.<\/p>\n But, the formula used to calculate interest on the loan is changing.<\/p>\n The previous formula was calculated as simple interest at the prime rate, minus two per cent. The new formula now calculates it as compound interest at the prime rate, plus two per cent.<\/p>\n Watch the full story in the video below:<\/p>\n As of March 2026, the prime rate in Canada is 4.45 per cent. Under the old system, homeowners would pay 2.45 per cent interest, while the new system would make homeowners pay 6.45 per cent interest.<\/p>\n \u201cWhen I heard about this coming up on the news, I thought \u2018Oh, that\u2019s kind of a big jump,’\u201d said Myrna Rouse.<\/p>\n Using the current prime rate and using the new formula, the total interest accrued over a 20-year term would be more than a third higher.<\/p>\n A home valued at $1.24 million with an estimated annual property tax increase and estimated home value increase of three per cent each year, amounts to $264,760 in interest owed.<\/p>\n Using the old formula, interest owed would be significantly less, at an estimated $168,973.<\/p>\n \u201cAnd that doesn\u2019t factor in as interest rates change. Prime is relatively low right now; if that goes up, that bill is going to go higher,\u201d said Sybil Verch, senior wealth advisor with Raymond James Ltd.<\/p>\n Verch says she\u2019s taking calls from clients who are worried about the impact of this change.<\/p>\n \u201cSome clients have thought, \u2018Well, maybe I won\u2019t do this anymore, and I\u2019m going to cancel my deferral program and just pay it. But seniors on a fixed income? That\u2019s going to hurt them,\u201d said Verch.<\/p>\n Finance Minister Brenda Bailey said last month the program changed<\/a> because it was being exploited by wealthy seniors who would invest the additional cash instead.<\/p>\n \u201cThe program is supposed to help cash-strapped seniors who can no longer afford property taxes, but want to stay in their family homes for as long as possible,\u201d said Finance Minister Brenda Bailey in February.<\/a><\/p>\n Yet, the Office of the Seniors Advocate says this change misses the mark and hurts the group of people it\u2019s intended to help.<\/p>\n \u201cFor those seniors who supplement their income by deferring the property tax, there is concern that when they sell their house, and they want to use that equity to fund their retirement, their remaining years, they\u2019ll have less money available because of the increased interest costs,\u201d said Dan Levitt.<\/p>\n Verch still says the program makes sense for seniors who are cash-strapped, even with higher interest payments, but does recommend homeowners speak to their financial advisor.<\/p>\n \u201cOne alternative the province can consider is having an income threshold. If we really want to help seniors who are on a tight income and defer their taxes, let\u2019s keep it at a low interest rate, but let\u2019s have an income threshold to qualify for the program.\u201d<\/p>\n