It's a good way to make money in the real estate business and from those taking advantage of it. It's a sound advice, too--deferring taxes payment, for now.
A Vancouver planner and real estate developer, Michael Geller, CBC News reports, says that the B.C property tax deferral campaign is making wealthy home owners to actually make more money.
The developer even admitted that he was the first in line to take advantage of the program.
Geller told CBC, "Most people can invest the money and get a better return. A lot of people I know take advantage of this program even though they have the money to pay their taxes because the current interest rate is 0.85 per cent."
He added that in the last year, he has deferred all his properties in Vancouver at about $60, 000.
In the program, people who are 55 years old or older can apply to defer property tax on a principla residence at the 0.85 percent simple non-compounding interest rate until sich time the same property has been disposed of. The younger ones can still qualify in the program but it will be under a higher interest rate.
Therefore, at the current rate, it means that a property tax bill of $6,000, for example, will have an interest rate of $51 annually.
Just last year, more than 36 thousand individulas have taken of the program. The loophole, perhaps is that there is no financial means test to find out whether or not an applicant has the ability to the taxes being deferred, CBC continues. However, this is being handled by using age as one of the major qualifications.
The deferral program was created to assist those on a fixed income who want to keep their homes but cannot afford to pay the property tax, which is attached to Vancouver's increasing real estate prices.
It remains to be seen whether the program would be able to alleviate the increasing housing pricing in the region.
