Should You Defer Your Property Taxes?
When you're a homeowner in British Columbia, one financial tool you might consider especially during times of economic pressure or retirement—is deferring your property taxes. The BC Property Tax Deferment Program can provide welcome relief, but like any financial decision, it’s important to understand both the upsides and the downsides.
As your trusted BC mortgage broker, I’m here to help you look at the full picture so you can make the most informed decision possible.
✅ The Upside of Deferring Your Property Taxes
1. Improved Cash Flow
The most obvious benefit is the ability to free up cash. Instead of making a lump-sum property tax payment every year, eligible homeowners can keep that money in their pocket—potentially using it to cover other expenses or invest elsewhere.
This can be especially helpful if:
You're living on a fixed income (e.g. in retirement)
You're experiencing a temporary drop in income
You have higher-priority debts to pay off
2. Low Interest Rates
The interest charged on deferred taxes through the BC program is much lower than typical borrowing rates, and it’s simple interest, not compounded. This makes it a far more affordable way to manage temporary cash flow issues compared to credit cards or personal loans.
3. No Repayment Until You Sell or Transfer
There are no monthly payments. You don't have to pay anything back until you sell the home, transfer ownership, or the homeowner passes away. This can make the program feel relatively "invisible" in the short term.
⚠️ The Downside of Deferring Your Property Taxes
1. You’re Increasing Your Debt
While it’s not a traditional loan, deferring your property taxes means you’re adding to the amount owed against your home. Over time, this balance grows, which reduces your equity—something to consider if you're planning to sell, refinance, or leave the home to heirs.
2. It May Impact Future Financing
If you're thinking of refinancing your mortgage, taking out a home equity line of credit (HELOC), or reverse mortgage, having deferred taxes on your title could be an issue. Lenders often want clean title, and deferred taxes show up as a lien—meaning you might have to pay it off first.
3. You Might Be Delaying Rather Than Solving a Problem
Deferring taxes can be a helpful short-term solution, but it's not always a long-term fix. If you're consistently struggling with household expenses, it may be time to review your overall financial strategy with a professional.
Who's Eligible to Defer?
There are two main tax deferment programs in BC:
Regular Program – for homeowners aged 55 or older, surviving spouses, or people with disabilities.
Families with Children Program – for homeowners supporting children under 18.
Your property must also have sufficient equity (at least 25% equity is required), and your mortgage must be in good standing.
Final Thoughts From Me
Deferring property taxes can be a smart financial move—but only when it fits into your bigger picture. It’s not a one-size-fits-all solution, and understanding how it affects your equity, borrowing power, and long-term goals is crucial.
If you're thinking about deferring your taxes and aren’t sure whether it’s the right move, let's chat. As a licensed mortgage broker, I can help you weigh your options and explore other ways to manage your home’s equity and affordability.