The constantly rising cost of living is creating a significant challenge for many Canadian seniors who are struggling to manage their finances while maintaining their quality of life. Property taxes, a substantial annual expense, is especially burdensome for seniors on a fixed income.
Fortunately, several Canadian provinces offer property tax relief, rebate, or deferral programs for seniors.
In this article, we will explore various property tax relief programs available to senior homeowners in different provinces and discuss how reverse mortgages can be a valuable tool to manage this large expense in retirement.
- Most Canadian provinces offer property tax relief, rebate, or deferral programs for seniors.
- A reverse mortgage allows homeowners 55 years or older to borrow against their home equity without selling their property or making regular mortgage payments.
- A reverse mortgage is very similar to a property tax deferral program and offers a broader range of potential benefits.
Property Tax Relief Programs for Seniors in Canada
Senior Homeowners’ Property Tax Grant: This program is for seniors 64 years of age or older, resident of Ontario, with an income less than $50,000 (single) or $60,000 (couple), who own and occupy their principal residence. Eligible homeowners can receive up to $500 each year they qualify for the property tax grant.
More information on the home owner grant application can be found on the Ontario government website.
Homeowner Basic Grant Program: All seniors aged 65 or older, who own and occupy their principal residence, and have a property value below $2,1250,000 are eligible to receive a basic grant. The basic grant amount currently ranges from $570 to $845 depending on the property’s location.
More details about the basic grant program can be found on the BC government website.
Property Tax Deferment Program: This property tax deferral program is available for seniors aged 55 or older, surviving spouses of any age, and those with a minimum of 25% equity in their principal residence.
This program allows low-income seniors to defer up to 75% of the annual property taxes every year, with repayment not required until they sell their home or choose to repay earlier. More information can be found here.
Property Tax Rebate for Seniors: This program is for seniors who paid the previous year's property tax, own and occupy their principal residence, and are eligible for the Guaranteed Income Supplement (GIS). Under this program, seniors can receive a rebate of 50% of the previous year’s property tax, up to $800.
More information can be found on the Nova Scotia government website.
Seniors Property Tax Deferral: This program is for seniors aged 65 or older who own and occupy their principal residence. The program allows eligible homeowners to defer up to 75% of their property taxes. The deferred taxes are repaid with interest upon sale or earlier if desired.
More information can be found on the Yukon government website.
Grant for Seniors to Offset a Municipal Tax Increase: This program is for seniors aged 65 or older, who own and occupy their principal residence, and have an income less than $58,200. This program allows for relief of an annual increase in property taxes of up to $500.
More information can be found on the Revenu Quebec website.
Alberta Seniors Benefit: This program is for seniors aged 65 or older, with an income less than $31,080 (single) or $50,720 (couple).
More information can be found in the Alberta Seniors Financial Assistance Information Booklet.
Seniors Property Tax Deferral Program: Available for seniors aged 55 or older, who own and live in their home, with at least 25% equity.
Under this program, the Alberta government will pay the senior’s property taxes directly to the municipality and eligibility is not based on the senior homeowner’s income. Repayment of the loan if required when the senior sells their home.
More information can be found on the Alberta government website.
Education Property Tax Credit: This program is for all homeowners in Manitoba who pay property taxes that includes a school tax component.
If eligible, retired homeowners can receive a tax credit of $437.50 to be applied against their school taxes. If the senior household has income of less than $40,000, they can be eligible for an additional $250 rebate.
More information can be found on the Manitoba government website.
Seniors' School Tax Rebate: This program is for seniors aged 65 or older, who own and pay school taxes on their principal residence and have a household income of less than $40,000.
Under this program, seniors can receive up to $293.75 in tax rebates.
More information on the Seniors’ School Tax Rebate can be found here.
Property Tax Allowance: This program is for homeowners receiving the Residential Property Tax Credit, with income-based eligibility.
In order to be eligible, the senior household must have a combined income of less than $22,000. The program currently allows a rebate of up to $300 in property taxes.
More information can be found on the Service New Brunswick website.
Property Tax Deferral Program for Seniors: This program is for seniors aged 65 or older, who own and occupy their principal residence, and are receiving the Provincial Residential Tax Credit.
This program allows for the deferral of any increase in property taxes from the year the homeowner turned 65. The deferred property taxes do not need to be paid until the home is sold.
More information can be found here.
Reverse Mortgages: A Financial Solution for Seniors
While property tax relief programs can provide some financial relief, they may not be enough to cover all living expenses for seniors. In these cases, a reverse mortgage is another option that can help seniors unlock the equity in their homes to cover living expenses, including property taxes.
Reverse mortgages in Canada allow homeowners aged 55 or older to borrow against the equity in their homes without having to sell their property or make regular mortgage payments. The loan is repaid when the homeowner sells the property, moves out, or passes away.
If you are a retired homeowner and are considering using a tax deferral program, then you should strongly consider a reverse mortgage instead because both options are loans and the interest rates are quite similar.
The reverse mortgage option is more attractive in that it can allow you to improve your overall lifestyle, rather than being limited to property taxes.
Eligibility and Benefits of a Reverse Mortgage
Eligibility for a reverse mortgage is based on age and property value, not annual income or credit scores. This is particularly beneficial for seniors on a fixed income or with less-than-perfect credit. Additionally, funds received from a reverse mortgage are tax-free, and homeowners can opt to receive the funds in installments rather than a lump sum.
This flexibility allows seniors to manage their cash flow more effectively and use the funds as needed, whether for property taxes, home repairs, or other living expenses.
Learn More: CHIP Reverse Mortgages
Managing Large Annual Expenses with a Reverse Mortgage
Property taxes are a significant annual expense for homeowners, and for seniors on a fixed income, it can be particularly burdensome.
A reverse mortgage can be used to manage large annual expenses like property taxes, allowing homeowners to remain living in their homes without having to sell or downsize.
By accessing the equity in their homes through a reverse mortgage, seniors can use the funds to pay their property taxes and other living expenses, while still retaining ownership of their homes. This can provide peace of mind for seniors who want to remain in their homes and communities during their retirement years.
Most provinces have property tax programs available for seniors and every older homeowner should check with their local property tax office to see which options are available to them.
Not all property tax programs are the same: some offer a rebate of property taxes, others offer a deferral of property taxes and some programs only offer a credit on your income taxes.
Seniors with lower income in retirement should always take advantage of any tax rebate programs available (it’s free money, after all). If they are only able to access a property tax deferral program, then they should consider getting a reverse mortgage instead for the flexibility it can offer over a program that is limited to property taxes only.
Regardless of which property tax program you are considering, it is important to understand the eligibility criteria and benefits of each program to determine the best option for your financial situation.
Consult with a financial advisor before you make any important decisions regarding how you manage your property taxes. If you are considering getting a reverse mortgage, make sure you consult with a reverse mortgage specialist, rather than a general mortgage broker.
Frequently Asked Questions (FAQs)
What is a reverse mortgage? Where can I learn more about them?
A reverse mortgage is a loan that allows homeowners aged 55 or older to borrow against the equity in their homes without having to sell their property or make regular mortgage payments.
The loan is repaid when the homeowner sells the property, moves out, or passes away.
Learn more: Unlocking the Benefits of Reverse Mortgages
Is a tax deferral program a loan? Will there be a lien on my home afterwards?
Yes, a tax deferral program is essentially a loan. In almost all cases, there will be an interest charge applied and a lien will be placed on your home. Monthly payments will not be required but the loan will need to be repaid when the house is sold.
What happens if I don’t pay my property taxes?
If you fail to pay your property taxes, the amount owing will continue to increase. Eventually, your municipality will be in a position to force the sale of your home in order to pay off your debt.