City looking at property tax deferral for seniors MATTHEW VAN DONGEN
Program to help those on fixed incomes
The city is poised to allow some struggling low-income seniors and disabled residents to put off paying property taxes until their homes are sold.
The election-year experiment follows in the footsteps of Halton Region and Ottawa, which already offer delayed tax payment options for income-poor homeowners.
Under the three-year pilot, an eligible homeowner could in theory put off paying any property taxes for years, so long as the total amount deferred remains below 40 per cent of the home’s assessed value. That homeowner would also have to be OK with the city recouping those taxes — plus around five per cent in annual interest — out of the proceeds from an eventual home sale.
Coun. Tom Jackson urged support for the program, noting the growing concerns of fixed-income seniors who report struggling to stay in their homes as spiking assessed property values lead to unaffordable tax hikes.
“Give this program a chance,” he said.
Councillors on Wednesday generally embraced the plan — which still needs council ratification next week — but argued over the fairness of “arbitrary” eligibility requirements like a household income threshold of about $34,800.
That limit, based on a percentage of maximum old age pension income, effectively “shuts out” many two-person households, argued Coun. Terry
Whitehead.
“I think we are inadvertently leaving behind people who could arguably be in even more need,” he said.
Stoney Creek resident and financial planner Viv Saunders also criticized the city’s decision to charge five per cent interest on deferred tax amounts, comparing it to “predatory lending.”
Finance head Mike Zegarac said the interest is not collected until a home is sold, and is meant to offset the cost of the program to all taxpayers. He agreed to councillors’ request to report back with possible future program changes like a “tiered” income threshold to help accommodate struggling married seniors.
Under the current proposed eligibility criteria, the city anticipates about 100 annual applications (worth about $300,000 in deferred taxes) based on the experience of Halton and Ottawa.
The city is also proposing to tweak existing programs designed to help homeowning seniors, including one that already allows deferral of tax increases (as opposed to total tax bills) and a $186 rebate for low-income residents over 65.
Those program requirements also spurred an inner city versus suburbs debate.
The rebate program, for instance, offers about $186 to low-income seniors — but only if the assessed value of their homes comes in under a certain threshold. In 2017, that would have been $409,200.
That “arbitrary” threshold effectively rules out many seniors living outside of the old city of Hamilton — even though their fixed incomes are not necessarily any higher, suggested Saunders.
Give this program a chance. COUN. TOM JACKSON