In most municipalities, property taxes are due by July 2 (unless it falls on a weekend; Vancouver is actually the second business of the month, which is July 3 this year) of each year, and there are typically late fees if your payment is not postmarked by the due date or if you pay less than the full balance. Unlike property transfer tax, which is one-time tax when you buy property and the ownership transfers to you, property taxes are an ongoing cost. With just over a month until the due date, here’s a look at what homeowners should know about paying property taxes:
- Homeowners are responsible for property taxes starting from closing date. Property taxes are assessed annually, and depending on when you close on a property, the previous owner may still owe a portion of that years’ taxes. For instance, if you closed on April 1, then the previous owner would be responsible for property taxes between January 1 and March 31. Around closing, your real estate attorney should determine how much the previous owner owes and credit you that amount to cover the previous owner’s portion of property taxes.
- Home owner grants can lower your tax bill. British Columbia offers grants to qualified homeowners that will lower the cost of property taxes on a primary residence. You must be a Canadian citizen or permanent resident to qualify for the Home Owner Grant, and larger grants are available to seniors, veterans or those with disabilities.
- Lenders generally collect and pay property taxes for high-ratio mortgages. If you have an insured mortgage–meaning one where you’re borrowing more than 80 per cent of the property’s value–then your lender will typically pay the property taxes on your behalf and include that amount in your mortgage instead of relying on you to pay property taxes directly to the municipality. If you have a change in status–for instance, you thought you’d qualify for the Home Owner Grant and are not eligible or you were not eligible in the past and now you are–be sure to notify your lender so that it will pay the appropriate amount.
- Homeowners can appeal property assessments. If you feel the amount of your property tax assessment is inaccurate, you have the right to appeal your property assessment. The deadline for filing appeals for 2015 assessments was February 2 and hearings were held in February and March. However, if you decide to appeal your assessment in the future, keep in mind that future prospective buyers will be privy to the home’s assessed value and getting a lower assessment could mean less leverage when you sell the property in the future.
