Canada’s most expensive province is finally giving hard-hit millionaire homeowners some help. The Government of British Columbia (GBC) raised the threshold for its Home Owner Grant. A primary residence worth up to nearly $2 million is eligible for the property tax rebate. Programs like this are usually for low-income households, not millionaire homeowners. The subsidy either says a lot about affordability in BC or explains its sky-high home prices.
BC Home Owner Grant
The BC Home Owner Grant provides funds to help lower the cost of property taxes. Any resident with a primary residence is eligible to apply as long as their home’s value is below the threshold value. For 2022, the threshold is $1,975,000, up 21.5% from the year before. You read that right; the threshold increased by over a fifth of last year’s threshold.
The threshold increase isn’t the measure of home prices or the inflation rate. It’s the amount the province thinks households need, to help to pay their property taxes.
The BC Government Is Handing Out Up To $770 To Reduce Property Tax Burdens
Most people claiming their principal residence in BC are eligible for the grant. In Metro Vancouver and the Capital A district, the maximum is $570. The rest of the province can claim up to $770 from the grant. Not only does BC have some of the lowest property tax rates in Canada and the US, but owners also get a subsidy to pay property taxes on expensive housing.
The BC Home Owner Grant Is A Sweet Deal For Owners and a Raw One For Buyers
Reducing property taxes makes it easier to carry higher debt loads more comfortably. A property tax subsidy adds to the maximum credit service capacity of households. At the median household income, this would translate to supporting home prices 1 to 1.5% higher. Existing owners get up to $770 off on their home, and the typical home price gets a boost of about $12k. Great news if you own, bad news if you’re trying to buy.
The BC Home Owner Grant is an odd program for $2 million homes. Typically this kind of program is used to help low-income households or families with special needs. Most people would find it difficult to classify someone living in a $2 million home as needing financial assistance.