Property tax deferrals in City of Powell River have reached new levels.
At the October 22 finance committee meeting, chief financial officer Adam Langenmaier outlined the property tax deferral program, which allows taxpayers to take advantage of a provincially administered program that allows qualified homeowners to defer any portion of their municipal taxes. According to a report from Langenmaier to councillors, the goal of this program is to aid residents who have been affected by rising property values and property taxes to stay in their homes by taking advantage of the equity created by rising property values.
Langenmaier told the finance committee he likes to report on deferred property taxes annually to bring councillors up to date on where the deferral program is sitting.
“It’s not a huge piece of our work but it is interesting to see how people are taking advantage of the program and whether it’s increasing or decreasing,” said Langenmaier.
He said in the years 2017 and 2018 the city saw significant increases in people taking part in the program. He said there was a 24 per cent increase in 2017, followed by a 21 per cent increase in 2018. For the year 2019 it was a 13 per cent increase and in 2020 there was a nine per cent increase.
“This tells me we might be looking at a time where people who are going to be taking advantage might have already taken part,” said Langenmaier.
Overall, in 2020, the total value of those taking part in the program has increased about $150,000 over the last year. Last year there was $705,000 in total deferrals and this year the city is sitting at $856,000.
Langenmaier said there was a slight increase in the average amount deferred, increasing by about $308 to an average of $2,922.49. Total applications in 2020 were 301 and 293 deferrals were approved, for a 97 per cent rate.
There has been a change to the deferral program in that it has gone online. The city no longer accepts paper deferrals, said Langenmaier. He said the online process has reduced the amount of time for the city to be paid by the province. Last year there was an issue where it was taking some time to collect money from the province but there is a much better collection time this year, according to Langenmaier.
Mayor Dave Formosa said looking back to 2013, which was the first year that Langenmaier reported, there was $302,630 deferred, and now the city was at $856,799. Formosa asked if there was any measurement of how Powell River does in comparison to the rest of BC. He also asked if there was interest charged by the province on the money advanced.
Langenmaier said interest rates to the taxpayer are charged annually by the province. He said the province is taking on this asset, distributing tax today and might not collect on that cash for 20 years, but at the end of that 20 years, it is going to get all of the tax back plus interest.
Councillor George Doubt, chair of the finance committee, said he had gone through Langenmaier’s report and was surprised the deferrals didn’t increase more in 2020.
“I expected it would because of the COVID-19 situation and people having difficulty paying their taxes,” said Doubt. “If anything, maybe that’s a good sign.”
