September 9th - 2007

Property tax deferral programs benefit seniors and disabled homeowners

Low-income seniors and disabled people in the City of Ottawa who own their homes may be able to defer some of the taxes on their property.

Low-income seniors and disabled people in the City of Ottawa who own their homes may be able to defer some of the taxes on their property.
 
Under Ottawa’s Low Income Seniors and Disabled Persons Tax Deferral program, mortgage-free seniors and disabled people with total household incomes lower than $30,000 will be able to apply to the city to defer some of the property taxes on their homes. To qualify, they must have owned the home for at least a year prior to the application, and it can't be a second home or an investment property. Seniors need to be 65 or older in the taxation year, and disabled people must meet the definition of disabled under the Ontario Disability Support Program to qualify.
 
According to the City of Ottawa Web site, “Tax deferral applies to current taxes only and not tax arrears or outstanding taxes. Relief is based on the total tax increase over the previous year. Any amount deferred under this program for taxation years before 2001 is subject to annual interest at a rate which is the lower of either the bank prime rate plus 0.5 per cent or a rate established by provincial regulations. No such interest may be charged for the 2001 or subsequent taxation years.”
 
Eligible homeowners can defer taxes until the house is sold or the eligible applicant dies or ceases to be eligible. At that point, any deferred amounts plus applicable interest charges immediately become a debt payable to the municipality, including part-year portions.
 
Other important points to note about the program include: the tax relief only applies where the current assessed value of the property falls below a threshold value of $500,000; the real property tax increase must be greater than $100 and 5% over the real property taxes of the previous year; and only the tax increase may be deferred. Finally, the total amount of tax relief available is restricted to a maximum of 75% of the current assessed value of the property.
 
British Colombia has a similar program that allows qualified homeowners, aged 60 and over to defer the payment of annual, municipal or rural property taxes on their homes as well. Like Ottawa, these deferred taxes plus interest and an administration fee must eventually be repaid, either before the home is transferred to a new owner, other than a surviving spouse, or upon death, through repayment by the estate of the deceased owner.
 
For more information on either program visit http://www.ottawa.ca/residents/proptaxes/residents/tax_deferral_en.html or http://www.rev.gov.bc.ca/rpt/property_tax_deferment.htm

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