Seniors who have participated in the province’s new property tax deferral program are finding that it helps them make ends meet, says a prominent seniors group.
Created in early 2013, the program allows seniors 65 and older to defer paying all or part of their residential property taxes through a home equity loan provided by the Alberta government. The loan has to be repaid once the homeowner moves out.
More than 1,700 seniors have taken advantage of the program in the past year, creating expectations that more seniors will sign up for it in 2014, said Dick Tansey, vice-president of the board of directors for Alberta Seniors United Now.
“I think the referral program is an excellent program,” he said. “It’s a benefit to those who are in their homes and who are struggling to make ends meet because of their fixed incomes.”
He added that many seniors were skeptical of the program at first but word has now gotten around from those already using it.
Last year, the program provided seniors with an average of $300 of disposable income per month, he said – or $4 million in total, based on a new release by the provincial government.
That’s a lot of money for someone who is property rich but cash poor, said Tansey. He added that Seniors United Now is now rallying with the province to decrease the current three per cent interest rate charged on the loans.
“We are of the view that three per cent more than covers the operating cost and it was never our intent when we started to pursue this program that it would be something the government would make money with,” he said.
He said the organization has asked the province to follow the example of another program in British Columbia where the tax rate is one per cent.
That program also requires seniors to pay about $60 in registration fees in the first year and $10 every subsequent year. But that’s still less than what seniors pay in Alberta, he said.
“Three per cent on $3,000 (property tax) is a little more than $60,” he said. “And they will recover all of the money they put out (once the homeowner moves out).”
To apply to the program, homeowners must be 65 years or older and have a minimum 25 per cent equity in their home. The home must also be the senior’s primary residence.
The program is voluntary and will not leave a debt to the family or children. As soon as the house is sold or transferred to another owner, the loan has to be repaid. That money will be taken out of the property value.
Seniors may apply to defer all or part of their residential property taxes for a period of one year or up to 10 years at a time. Program applications are available on the Alberta Health website at health.alberta.ca and from branches of ATB Financial.
Applications are accepted throughout the year but it is recommended that homeowners apply at least 30 days before their municipal tax deadline to avoid penalties for late tax payment.
