Has a property-tax rebate for 小蓝视频 homeowners passed its best-before date?
Approaching $1 billion annually, the 小蓝视频 homeowner grant refunds a portion of property taxes to most owners of principal residences.
However, as home values continue to rise, there are renewed calls to cancel, or amend, the grant and redistribute the money to affordable-housing projects or other housing-related subsidies.
The homeowner grant was created in 1957 by W. A. C. Bennett to provide property-tax relief for principal residences. The grant has persisted since then and the prospect of terminating it has long been considered “political suicide” for politicians.
The grant is limited to a maximum home value, which is continuously re-assessed to capture roughly the same number of properties. In 2023, the grant applies to all residential properties valued at less than $2,125,000, up from $1,625,000 in 2021.
The regular grant amount is now $570 for properties located in the Victoria area, Metro Vancouver and the Fraser Valley. For all other areas of the province, the amount is $770. Seniors (over age 65) receive an additional $275. All told, the grant will cost $892 million this year and is on pace to reach $1 billion in about five years.
Economist Marc Lee of the Canadian Centre for Policy Alternatives calls the grant “a pointless tax reduction to those with the privilege of home ownership,” and says it should be cancelled or at least redistributed in an income-tested form.
“The people who don’t own homes are the most at risk and most vulnerable in our society. I think that’s the area of the market where we most are concerned about in terms of public policy, and yet we don’t provide any equivalent,” said Lee.
Lee said the provincial government has yet to deliver on a promise to provide $400 annual grants to renters. With 669,450 renter households in 小蓝视频, according to Statistics Canada, such a grant would cost $267 million a year.
Another idea, said Lee, is to take all or a large portion of the grant money and redistribute it to affordable housing projects.
Lee thinks doing so is no longer political suicide given how real estate has become the primary driver of wealth in the province.
“I think if you took that money and said, ‘Well, we’re going to spend it all on developing non-market or social housing… and addressing homelessness,’ I think people would probably buy that. I think if you took that same amount of money and said, ‘OK, we’re instead going to create this income-tested housing grant that’ll go to, you know, renters or owners alike, I think people would buy it,” said Lee.
Vancouver-based real estate developer Michael Geller is typically critical of property taxes that affect housing affordability, but says the grant is unnecessary for most recipients and given the state of homelessness and lack of affordable housing, the funds can easily be diverted.
“This is one [grant] that’s outlived its usefulness. I do sympathize with those who are renting and [see] grants going to homeowners,” said Geller.
He also points out that the threshold applies across the province, which means a $2.1-million property in rural 小蓝视频 is treated no differently than one in Vancouver.
“In some communities around 小蓝视频, that’s the nicest home in town and we’re giving the owner a grant,” said Geller.
Housing for low-income individuals is needed, in particular, said Geller, who estimates it costs about $500,000 per fully subsidized unit. So, a four-year political term would fully fund about 7,200 homes with the redistributed grant.
Provincial housing ministers have long defended the grant, noting it assists seniors — although as Lee and Geller both note, property taxes can be deferred by seniors (over age 55) and the deferments are clawed back from the equity upon sale or transfer. Families with children can also defer property taxes.
In an interview with Glacier Media this month, Housing Minister Ravi Kahlon defended the grant but suggested his government is considering changes.
“It supports a lot of seniors, and certainly, in the future, we’ll have to look at it. We have to find ways to ensure that it’s supporting the people who need the support the most,” said Kahlon.
From 2018 to 2021, homelessness increased 11.5 per cent, according to 小蓝视频 Housing’s 2020/21 report on homeless counts in 小蓝视频
