B.C.'s homeowner grant doesn’t distinguish between rich and poor, critics charge
Under the current program, well-off homeowners as well as needy can qualify for a program that will cost the province $821 million this year
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The provincial government has increased the home value threshold for the homeowner grant by 33 per cent this year, a decision B.C.’s finance minister says will help some British Columbians remain in their homes amidst skyrocketing property prices.
But critics say raising the homeowner grant by a uniform amount across the province and for all income levels is a poor use of taxpayer funds.
The property value threshold to qualify for the $560 grant is now $1.6 million, up from $1.2 million in 2016. Raising the amount means that 91 per cent of British Columbian homeowners, and 83 per cent of Metro Vancouver owners, will qualify. The benefit will cost the government $821 million this year, up from $809 in 2016.
“I think it’s time to question why the provincial government is offering grants to wealthy homeowners when there appears to be insufficient funds to subsidize single mothers who can’t afford their rent,” said Michael Geller, an architect and urban planner.
In a story published Jan. 10, Metro explored the growing use of the property tax deferral program, which allows homeowners over 55 or those with children to defer their property taxes. The province reimburses municipalities for the deferred taxes.
Geller is critical of both programs: as neither are income-tested, they benefit the well-off as well as “house rich, cash poor” homeowners.
Marc Lee, an economist with the Canadian Centre for Policy Alternatives, has proposed eliminating the homeowner grant program in favour of an income-tested credit, similar to the GST credit, Canada Child Benefit or Old Age Security.
“It could be designed to provide greater benefit to low-income households and then phase out gradually as income rises,” Lee wrote in a Nov. 2 blog post. “Unlike the current homeowner grant, renters would be included in this system, as they pay property taxes indirectly through their rent.”
Lee points out that a previous B.C. tax credit for renters was phased out in 1993 as a cost-cutting measure.
Metro Vancouver municipal leaders would like to see the homeowner grant increase more for the Vancouver region, to the point that 91 per cent of Metro Vancouver homeowners would be covered, said Vancouver coun. Raymond Louie. Between January 2014 and September 2016, home prices in Metro Vancouver had risen by 52 per cent while the homeowner grant threshold rose by nine per cent.
“Metro Vancouver (residents), by virtue of us losing the homeowner grant, are paying more of the school tax than the rest of the province,” Louie said.
In calculating this year’s increase, Finance Minister Mike de Jong said the goal was to ensure that the same homeowners who had qualified last year would qualify again this year. In answer to a question about income testing, de Jong replied the grant is tied to ownership of property.
As for the regional home price disparities, de Jong said the program has always been calculated on a provincial basis, to benefit homeowners across British Columbia.