Chad Skelton
Sun
VICTORIA – First-time home buyers, and low-income seniors living in million-dollar homes, received a break from the provincial government Tuesday.
The province announced in January that it would increase the Home Owner Grant threshold from $780,000 to $950,000– so homeowners with houses worth less than that will still receive the basic $570-a-year grant (or $845 for seniors).
On Tuesday the province went further, announcing that the full grant will be available to all low-income seniors, regardless of how much their property is worth.
Finance Minister Carole Taylor said the new rules are designed to help poor seniors who bought their homes decades ago and now face huge property tax bills on multi-million-dollar homes.
“We think this will really help a lot of people to stay in their homes and continue to be independent rather than being forced to sell their home because they are so house-rich,” she said.
The province announced it would also lower the eligibility for property tax deferment from age 60 to 55.
That program allows homeowners to defer paying their property taxes until after their home is sold– at which point the taxes, plus a below-prime rate of interest, are taken out of the proceeds of the sale.
Taylor said in the past the deferment program was not popular with seniors, who worried about leaving debts for their children to pay out of their estate.
But as the baby boomers age, she said, the program has become increasingly popular– especially for those who retire early.
Tuesday’s budget also included an expansion of the First Time Home Buyers program, which allows first time buyers to avoid paying the property transfer tax — which can run as high as $5,500.
Previously, the complete tax exemption was only available to home buyers if the property they bought cost less than $265,000 — or $325,000 if they lived in the Lower Mainland or south Vancouver Island.
Tuesday’s budget increases that threshold to $375,000 for the entire province.
Cameron Muir, an economist with the B.C. Real Estate Association, said the raised threshold should make it easier for first time buyers to get into the housing market, especially in smaller communities.
“For first-time home buyers who are facing an affordability squeeze right now, it gives them a little bit of extra room,” he said.
© The Vancouver Sun 2007