BC’s Property Tax Deferment Program Is Changing in 2026

For years, many retired homeowners have used BC’s Property Tax Deferment Program as a practical cash-flow tool in retirement. It allowed seniors to reduce immediate housing expenses and manage rising property taxes while living on a fixed income.

Under the Regular Program, deferred taxes were charged at Prime minus 2% using simple interest, making it an attractive, low-cost option.

That changes beginning with the 2026 tax year.

As part of Budget 2026, any new property taxes deferred going forward will be charged at:

Prime + 2% with monthly compounding interest

What That Means

• Interest will accrue at 2% above Prime

• Interest will be compounded monthly

• Each month’s interest will be added to the outstanding balance

• Future interest will be charged on that growing balance

Deferred balances from 2025 and earlier will remain under the previous terms. However, homeowners enrolled in automatic renewal will have their 2026 taxes deferred under the new structure unless they opt out before their municipal property tax deadline.

Why This Matters

From a planning perspective, this represents a significant shift.

What was once a below-market government advance is now structured more like long-term secured borrowing. Because the interest compounds, the deferred balance can grow more quickly over time — reducing home equity until the amount is repaid upon sale or refinance.

A Simple Example

Let’s assume:

• Annual property taxes: $18,000

• Prime rate: 6% (for illustration)

• New deferment rate: Prime + 2% = 8%

• Interest compounded monthly

Year 1

$18,000 deferred at 8% compounded monthly
After one year, the balance would be approximately:

$19,494

That’s about $1,494 in interest in the first year alone.

After 5 Years (Deferring $18,000 Each Year)

If a homeowner deferred $18,000 annually for five consecutive years at 8% compounded monthly, the total deferred balance would grow to approximately:

$114,000–$120,000+

Of that amount, roughly $24,000–$30,000 would be interest, depending on rate fluctuations.

And because interest compounds, the cost accelerates over time.

For some homeowners, the program may still make sense. But it’s no longer the low-cost cash-flow strategy it once was, and it warrants a closer review within a broader retirement and estate plan. 

If you’re wondering how these changes may impact your long-term plans, I’m always available to have that conversation. While I can’t provide financial advice, I can help you understand how this may affect your real estate equity and overall strategy. And if needed, I’m happy to connect you with a trusted financial advisor who can review your specific situation and discuss your options in detail.

As always, my role is to make sure you have the right information to make informed decisions.

.