OSOYOOS TIMES-March 10, 2010

By Paul Everest - Osoyoos Times

Part of the 2010 provincial budget announced March 2 includes a proposed tax deferral for homeowners with children under the age of 18 that will come into effect in the next few months.
Although the proposed deferral program would give families the option of deferring all or part of their annual property taxes, a local accountant said people who opt to take part in the program could be digging themselves a large financial hole.
Jeff Duguid, a partner at the Osoyoos office of White Kennedy Chartered Accountants, said the proposed tax deferral program for families included in the provincial budget is similar to British Columbia’s property tax deferment program for homeowners who are 55 years of age or older.
Under that program, homeowners who meet certain criteria can defer all or part of their annual property taxes for as long as they live in their home.
The deferred taxes must be fully repaid with interest, however, before a home can be legally transferred to a new owner other than a surviving spouse or upon the death of home’s agreement owner.
Duguid said while this program might make sense for an elderly person in the last years of their life where the financial burden of repaying deferred taxes would be passed on to beneficiaries, younger families would only benefit from such deferrals in the short term.
According to the budget, interest charged on deferred taxes will be at the prime rate.
Duguid said that rate could be anywhere between 0.25 and 2.25 per cent and when it’s time to pay back the deferred taxes, homeowners will potentially face a large debt.
It would be easier to pay back the yearly tax rate, he said, rather than deal with a large lump sum payment down the road.
Property taxes are used to support community infrastructure and services, Duguid added, and he raised the question of how the Town of Osoyoos would continue to receive revenue for such services if a high number of Osoyoos families used the tax deferral programs.
“Does the Town get funding from the province?” he said.
Jim Zakall, the Town of Osoyoos’s financial services director, said families who qualify for this program would be responsible for paying their water, sewer and garbage user fees to the Town in addition to claiming their homeowner grant.
“The balance outstanding on their property taxes will be paid by the province and the tax deferment charge (being the amount paid by the province), plus an administration fee will be levied against the owner’s property,” he said in an email. “The Town will still receive all their funding.”
The budget outlines that homeowners must have at least 15 per cent equity in their homes to qualify for the deferral program.
Under the deferral program for seniors, homeowners must have “a minimum equity of 25 per cent in your home based on assessed values as determined by BC Assessment.”
The B.C. government’s 2010 budget also contains a pledge that all revenue received from the proposed HST, as well as four other revenue sources will go towards health spending.
Paul McCavour of Osoyoos, who is leading a local campaign to prevent the HST from coming into effect this year, said on March 7 that he hadn’t yet had a chance to study the government’s promise to devote HST revenues to health care spending.
He said, however, that such a pledge would not affect the efforts of local residents or other anti-HST groups around B.C. to quash the tax.
“It certainly won’t change our struggle, that’s for sure,” he said, adding that he’s waiting to hear from other anti-HST colleagues in other parts of B.C. about how to respond to the government’s pledge.
According to the government, “total health care spending will reach $17.9 billion or 42 per cent of all government expenditures over the next three years.”
The government is also committing $60 million over the next three years for sports and arts programs, with half of that amount going towards enhancing “opportunities among British Columbians in the arts, such as visual art, music, theatre and dance.”
Sue Whittaker, president of the Osoyoos and District Arts Council, said her organization isn’t sure how much money will be coming their way from the province this year.
Last year, the council did receive a basic assistance grant from the BC Arts Council (BCAC) to the tune of $2,478.
With a local government matching grant of $4,000, the council received $6,478 last year, Whittaker said, but the BCAC did not grant the Osoyoos council a $2,500 performance award in 2009.
The council has requested $8,978 from the province for 2010, Whittaker said, but whether or not Osoyoos will see that money won’t be known until next month.
Aside from provincial monies, the council relies heavily on fundraising and most of its revenue goes towards keeping the Osoyoos Arts Centre on Main Street open, she said.
The council will likely “scrape through” even if it doesn’t receive as much money from province as it has in previous years, she said, but arts programs in larger communities might feel the pinch more, especially after the government clawed back millions of dollars in community gaming grants last year.
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