The City of Richmond plans to actively promote the rarely utilized Provincial Tax Deferment Program to ease homeowner concerns over significant hikes in property value assessments — particularly for those with single-family, detached homes.
Detached homes have increased more in value relative to condos and townhouses, which means homeowners of detached properties will have to pay a greater share of the city’s property tax.
This year, the median increase for a detached home is 43 per cent while the median increase for strata units is just 17 per cent.
Because one tax rate is applied to all assessed residential property values, “property owners whose properties outperformed the average [increase in assessment] will see much higher tax increases while those with property value changes less than the average will see tax decreases,” notes a report from Andrew Nazareth, Richmond’s manager of finance and corporate services.
While the assessments dictate who pays what share of taxes, a 2.95 per cent tax hike (that increases the tax rate) from the city will impact all households this year.
By deferring one’s taxes, a fixed-income homeowner can benefit from a sub-prime, non-compounding interest charge of 0.7 per cent from the provincial government.
The report notes increased home equity over the past 10 years far exceeds the gains in property taxes.
Nazareth notes that since 2007, detached home values have increased by about $568,580, on average, to 2016. In that time, property taxes for detached homes have increased, on average, about 50 per cent, from $2,905 to $4,503. Had a homeowner deferred all of their taxes, a lien of $36,711, plus $1,635 in interest, would be placed on the home, valued, in 2016, at $1,160,068.
The regular deferral program is available to any homeowner aged 55 or older, a surviving spouse of any age or a person with a disability. One must own at least 25 per cent of the property’s equity and be a Canadian citizen or permanent resident who has been living in B.C. for at least one year.
Nazareth notes those seniors who can still afford to pay their taxes can nevertheless defer them and actually make money by investing in a 1.5 per cent term deposit.
Notably, the program offers families with children a deferral interest charge of 2.7 per cent, at the moment.
Nazareth states that prior to 2016, the City of Richmond received approximately 270 new tax deferment applications annually.
However, with significant assessment increases for single-family detached homes in 2016, the City received more than 500 new applications this year.
The city currently has more than 1,600 active deferment files and has closed in excess of 3,000 deferment files since 2000.
“Given that the City has almost 70,000 residential units and over 14,000 seniors in the community, the number of active deferments is low in comparison,” adds Nazareth.
According to BC Assessment, a typical West Richmond home is now valued at $2.7 million, up from $1.9 million. South Richmond homes will go up to $1.5 million, from $1.1 million in 2016.
The drastic changes are intended to better reflect the real-time sales prices of such homes. Even then, most homes are selling far in excess of their new valuations.
The top assessed residential property in Richmond is an acreage at 12911 No. 3 Road, coming in at $11.9 million.
The property is reported to be owned by a company of Chinese real estate tycoon Kevin Sun, who is under investigation by various agencies, in relation to fraud and banking scandals.
The highest assessed residential property in a proper neighbourhood is 6260 Gibbons Drive, valued at $5.6 million (up from $4.1 million in 2016), even though it sold in July 2015 for $5.8 million.
