Increased Home Owner Grant Threshold in 2017

Marci • Jan 10, 2017

The Government of British Columbia just released news that they have increased the home owner grant threshold from $1.2M to $1.6M, a 33% increase over last year. The goal is to help keep property taxes affordable, this recent move will help ensure all those who received the grant in 2016 will also receive it in 2017. The following explanation is taken directly from the BC Government website.

The Province is increasing the home owner grant threshold to $1.6 million, helping keep property taxes affordable for families and ensuring most home owners will continue to receive the full grant this year, Finance Minister Michael de Jong announced today.

“This is a 33% increase over last year,” said de Jong. “We are doing our part to help keep housing costs affordable for families. Local governments can also work to keep property taxes at a manageable level for residents by controlling their spending and reigning in the amount of revenue they need to operate.”

The Province is projected to spend $821 million on home owner grants in 2017-18, compared to an estimated $809 million in 2016-17. The Province reimburses municipalities for the full cost of the home owner grant to ensure municipal revenues are not affected.

“The threshold increase to $1.6 million helps ensure virtually everyone who received the grant last year will also receive it in 2017. The strength of the Province’s economy and sound fiscal management have put us in a position to raise the threshold by such a large amount this year to help home owners.”

The increase to the 2017 home owner grant threshold means that provincewide, 91% of homes will remain below the threshold and if eligible, their owners will receive the full grant amount. In many communities throughout the province, most or all homes are covered by the threshold. In Metro Vancouver, 83% of homes will be below the threshold. For properties assessed above this threshold, the grant is reduced by $5 for every $1,000 of assessed value in excess of the threshold.

There are two types of home owner grants:

  • The basic grant can reduce residential property taxes on an owner’s principal residence by up to $570, or if the home is located in a northern and rural area, up to $770.
  • An additional grant is available to home owners 65 years of age or older, or who qualify under the persons with disabilities category, or who are the surviving spouse of a veteran who received certain war-veteran allowances. This additional grant can reduce residential property taxes on an owner’s principal residence by up to $845, or if the home is located in a northern and rural area, up to $1,045.

Low-income home owners who would have received the additional home owner grant can apply for a low-income supplement, which replaces any reduction in the grant caused by having a property valued over the threshold. The low-income supplement is available to qualifying seniors, certain veterans or their surviving spouse and persons with disabilities.

Property tax deferment is another option that can help make home ownership more affordable. Property tax deferment is a low-interest loan program that allows qualifying B.C. home owners to use the equity in their homes to defer payment of their annual property taxes. Qualifying home owners can defer all, or a portion of, the annual property taxes on their principal residence.

Quick Facts:

  • Decisions about the threshold are based on BC Assessment data, and are made in the context of setting priorities within a balanced budget.
  • Home owners who qualify for the home owner grant are Canadian citizens or permanent residents of Canada who live in British Columbia. Grants are only available for an owner’s principal residence.
  • Home owner grant thresholds in recent years:
    • 2016: $1.2 million
    • 2015: $1.1 million
    • 2014: $1.1 million (threshold lowered as a cost-savings measure)
    • 2013: $1.295 million
    • 2012: $1.285 million
    • 2011: $1.15 million
    • 2010: $1.05 million

Learn More:

For more information about home owner grants, visit: http://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/reduce/home-owner-grant/under-65
or contact your municipality or the Province if your property is in a rural area.

For more information about property tax deferment, visit: http://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/pay/defer-taxes
or call 250 356-8121 (Victoria) or 1 888 355-2700 (toll-free in B.C.)

Share

By Marci Deane 27 Mar, 2024
A question that comes up from time to time when discussing mortgage financing is, “If I have collections showing on my credit bureau, will that impact my ability to get a mortgage?” The answer might have a broader implication than what you might think; let's spend a little time discussing it. Collections accounts are reported on your credit bureau when you have a debt that hasn’t been paid as agreed. Now, regardless of the reason for the collection; the collection is a result of delinquency, it’s an account you didn’t realize was in collections, or even if it’s a choice not to pay something because of moral reasons, all open collections will negatively impact your ability to secure new mortgage financing. Delinquency If you’re really late on paying on a loan, credit card, line of credit, or mortgage, and the lender has sent that account to collections, as they consider it a bad debt, this will certainly impact your ability to get new mortgage financing. Look at it this way, why would any lender want to extend new credit to you when you have a known history of not paying your existing debts as agreed? If you happen to be late on your payments and the collection agencies are calling, the best plan would be to deal with the issue head-on. Settle the debts as quickly as possible and work towards establishing your credit. Very few (if any) lenders will even consider your mortgage application with open collections showing on your credit report. If you’re unaware of bad debts It happens a lot more than you’d think; people applying for a mortgage are completely unaware that they have delinquent accounts on their credit report. A common reason for this is that collection agencies are hired simply because the lender can’t reach someone. Here’s an example. Let’s say you’re moving from one province to another for work, you pay the outstanding balance on your utility accounts, change your phone number, and make the move. And while you think you’ve paid the final amount owing, they read your meter, and there is $32 outstanding on your bill. As the utility company has no way of tracking you down, they send that amount to an agency that registers it on your credit report. You don't know any of this has happened and certainly would have paid the amount had you known it was due. Alternatively, with over 20% of credit reports containing some level of inaccuracy, mistakes happen. If you’ve had collections in the past, there’s a chance they might be reporting inaccurately, even if it's been paid out. So as far as your mortgage is concerned, it really doesn’t matter if the collection is a reporting error or a valid collection that you weren’t aware of. If it’s on your credit report, it’s your responsibility to prove it’s been remediated. Most lenders will accept documentation proving the account has been paid and won’t require those changes to reflect on your credit report before proceeding with a mortgage application. So how do you know if you’ve got mistakes on your credit report? Well, you can either access your credit reports on your own or talk with an independent mortgage advisor to put together a mortgage preapproval. The preapproval process will uncover any issues holding you back. If there are any collections on your bureau, you can implement a plan to fix the problem before applying for a mortgage. Moral Collections What if you have purposefully chosen not to pay a collection, fine, bill, or debt for moral reasons? Or what if that account is sitting as an unpaid collection on your credit report because you dispute the subject matter? Here are a few examples. A disputed phone or utility bill Unpaid alimony or child support Unpaid collections for traffic tickets Unpaid collections for COVID-19 fines The truth is, lenders don’t care what the collection is for; they just want to see that you’ve dealt with it. They will be reluctant to extend new mortgage financing while you have an active collection reporting on your bureau. So if you decide to take a moral stand on not paying a collection, please know that you run the risk of having that moral decision impact your ability to secure a mortgage in the future. If you have any questions about this or anything else mortgage-related, please connect anytime! It would be a pleasure to work with you!
By Marci Deane 20 Mar, 2024
Deciding to list your home for sale is a big decision. And while there are many reasons you might want/need to sell, here are 3 questions you should ask yourself; and have answers to, before taking that step. What is my plan to get my property ready for sale? Assessing the value of your home is an important first step. Talking with a real estate professional will help accomplish that. They will be able to tell you what comparable properties in your area have sold for and what you can expect to sell your property for. They will also know specific market conditions and be able to help you put a plan together. But as you’re putting together that plan, here are a few discussion points to work through. A little time/money upfront might increase the final sale price. Declutter and depersonalize Minor repairs A fresh coat of interior/exterior paint New fixtures Hire a home stager or designer Exterior maintenance Professional pictures and/or virtual tour But then again, these are all just considerations; selling real estate isn’t an exact science. Current housing market conditions will shape this conversation. The best plan of action is to find a real estate professional you trust, ask a lot of questions, and listen to their advice. What are the costs associated with selling? Oftentimes it’s the simple math that can betray you. In your head, you do quick calculations; you take what you think your property will sell for and then subtract what you owe on your mortgage; the rest is profit! Well, not so fast. Costs add up when selling a home. Here is a list of costs you’ll want to consider. Real estate commissions (plus tax) Mortgage discharge fees and penalties Lawyer’s fees Utilities and property tax account settlements Hiring movers and/or storage fees Having the exact figures ahead of time allows you to make a better decision. Now, the real wildcard here is the potential mortgage penalty you might pay if you break your existing mortgage. If you need help figuring this number out, get in touch! What is my plan going forward? If you’re already considering selling your home, it would be fair to guess that you have your reasons. But as you move forward, make sure you have a plan that is free of assumptions. If you plan to move from your existing property to another property that you will be purchasing, make sure you have worked through mortgage financing ahead of time. Just because you’ve qualified for a mortgage in the past doesn’t mean you’ll qualify for a mortgage in the future. Depending on when you got your last mortgage, a lot could have changed. You’ll want to know exactly what you can qualify for before you sell your existing property. If you’d like to talk through all your options, connect anytime! It would be a pleasure to work with you and provide you with professional, unbiased advice.
By Marci Deane 13 Mar, 2024
A no-frills service or product is where non-essential features have been removed from the product or service to keep the price as low as possible. And while keeping costs low at the expense of non-essential features might be okay when choosing something like which grocery store to shop at, which economy car to purchase, or which budget hotel to spend the night, it’s not a good idea when considering which lender to secure mortgage financing. Here’s why. When securing mortgage financing, your goal should be to pay the least amount of money over the term. Your plan should include having provisions for unexpected life changes. Unlike the inconvenience of shopping at a store that doesn’t provide free bags, or driving a car without power windows, or staying at a hotel without any amenities, the so-called “frills” that are stripped away to provide you with the lowest rate mortgage are the very things that could significantly impact your overall cost of borrowing. Depending on the lender, a “no-frills” mortgage rate might be up to 0.20% lower than a fully-featured mortgage. And while this could potentially save you a few hundreds of dollars over a 5-year term, please understand that it could also potentially cost you thousands (if not tens of thousands) of dollars should you need to break your mortgage early. So if you’re considering a “no-frills” mortgage, here are a few of the drawbacks to think through: You'll pay a significantly higher penalty if you need to break your mortgage. You'll have limited pre-payment privileges. Potential limitations if you want to port your mortgage to a different property. You might be limited in your ability to refinance your mortgage (without incurring a considerable penalty). Simply put, a “no-frills” mortgage is an entirely restrictive mortgage that leaves you without any flexibility. There are many reasons you might need to keep your options open. You might need to break your term because of a job loss or marital breakdown, or maybe you decide to take a new job across the country, or you need to buy a property to accommodate your growing family. Life is unpredictable; flexibility matters. So why do banks offer a no-frills mortgage anyway? Well, when you deal with a single bank or financial institution, it’s the banker’s job to make as much money from you as possible, even if that means locking you into a very restrictive mortgage product by offering a rock bottom rate. Banks know that 2 out of 3 people break their mortgage within three years (33 months). However, when you seek the expert advice of an independent mortgage professional, you can expect to see mortgage options from several institutions showcasing mortgage products best suited for your needs. We have your best interest in mind and will help you through the entire process. A mortgage is so much more than just the lowest rate. If you have any questions about this, or if you’d like to discuss anything else mortgage-related, please get in touch. Working with you would be a pleasure!
Share by: