The British Columbia government has increased the threshold for a grant aimed at homeowners to ensure recently released property assessments don't cut people out of the program.
The changes mean owners whose homes are worth up to $1.65-million are now eligible for the province's homeowner grant, up from $1.6-million last year. The program provides $570 toward the costs of property taxes for owners eligible for the basic grant, with higher amounts for northern and rural residents, people with disabilities or seniors.
BC Assessment, the government agency that assigns property values across the province, released its latest round of assessments this week, showing increasing property values in most communities across the province. In the Vancouver region, where assessments had been skyrocketing for years, property values increased at a much slower rate than in previous years and in some cases declined slightly.
Eligible homeowners must apply each year for the grant, which is meant to offset property taxes on an owner's principal residence. The grant is automatically calculated on a homeowner's property-tax notice.
The previous Liberal government significantly increased the threshold for the grant last year, from $1.2-million to $1.6-million, after property values spiked by as much as 40 per cent in some areas.
Tom Davidoff, a University of British Columbia business professor who specializes in real estate, has long opposed the homeowner-grant program, which he says is antiquated and invites unaffordability.
"As a matter of policy-making, reducing anybody's property taxes, and spending taxpayer money to do so, makes Vancouver less affordable, less efficient as an economy and redistributes from renters and future property owners to current property owners who are doing plenty well financially," Prof. Davidoff said.
Raising property taxes while cutting income and sales taxes, meanwhile, would target homeowners who do not pay income taxes or buy goods locally and have the effect of reducing property prices, Prof. Davidoff said. Homeowners over the age of 55 can defer their property taxes under the province's low-interest loan program.
"Grandma can save the property tax, go on a trip with half the money, put the other half in the stock market and be ahead at the end of the day," he said. "So grandma is not a legitimate reason to do this."
In addition to the $570 basic grant, homes located in northern or rural areas are eligible for $770; homeowners who are 65 years or older, or with a disability, eligible for up to $845; and homeowners 65 or older, or with a disability, and in a northern or rural area, up to $1,045.
There remains no word on similar relief for renters, as promised by the BC NDP in its election platform. The party had promised a $400 annual rebate for households that rent, regardless of income levels and how much is spent on housing.
"Why wouldn't renters be given the same opportunity to have a few more bucks in their pocket to help defray their costs?" John Horgan said in an editorial board meeting with The Globe and Mail last spring. "I think it's overdue."
B.C. Municipal Affairs and Housing Minister Selina Robinson was not available for an interview on Wednesday. A statement provided by her ministry said the government will look at more affordability measures as part of this year's budget. "We are working on short and long-term actions to making housing more affordable for people, to close speculation loopholes and reduce tax fraud and money laundering in B.C. real estate," the statement said. "The renter's rebate is part of these discussions around our comprehensive housing strategy."
The provincial government announced the new grant threshold on Wednesday, as B.C. residents began receiving their 2018 property assessment notices in the mail.
Data released on Tuesday by BC Assessment for the period from July 1, 2016, to July 1, 2017, showed mixed results for Greater Vancouver detached properties, which ranged from slipping 5 per cent in value to climbing 25 per cent.
For the Vancouver region as a whole, the latest assessments for detached houses showed the market cooling off compared with the previous one-year period's soaring values of roughly 15 per cent to 50 per cent.
Meanwhile, the assessed values of residential strata units, such as condos, rose 5 per cent to 35 per cent in urban areas.