B.C. Finance Minister Brenda Bailey said in February that the program was being used by ‘people who didn’t need it’ due to the low interest rates.CHAD HIPOLITO/The Canadian Press
Advocates for B.C. seniors are pushing back against changes to a property tax deferment program that they say has turned a safety net for lower-income seniors into a high-cost loan.
But the province says its overhaul of the low-interest loan program, which hikes interest rates to commercial market levels, was necessary to discourage people from using the program as an investment vehicle.
The Council of Senior Citizens’ Organizations of BC, an umbrella group representing roughly 80,000 seniors in the province, is calling on the government to reverse the changes.
“They were ill-advised on making the changes that they did,” COSCO BC president Leslie Gaudette said in an interview.
“It’s making something that was a very reasonable and fair deal for all low-income seniors to defer their property taxes into something where they’re paying higher interest rates that aren’t warranted under the government’s own aims.”
The program was introduced in 1974 as a way to help house-rich but cash-poor homeowners age in place by turning their equity into cash flow.
It allows eligible homeowners aged 55 and older, surviving spouses and people with disabilities to defer payment of their property taxes until they sell or transfer ownership of their home, with the government paying the taxes on their behalf as a secured loan registered against the property. A similar program is available for families with children.
B.C. budget worries advocates for seniors’ housing
Budget 2026 increased the interest rate from prime minus 2 per cent simple interest, or 2.45 per cent based on the Bank of Canada’s current prime interest rate, to prime plus 2 per cent, compounded monthly, for an effective rate of 6.64 annually. Changes apply to property taxes deferred in 2026 and going forward; existing balances remain at previous interest rates. The deadline to opt out of automatic renewal for the program was June 1.
Defending the change in February, Finance Minister Brenda Bailey said in the legislature that because of the program’s low interest rate, “folks who didn’t need it accessed it and took that cheap funding and invested it to make money.”
Her statement is supported by numerous online posts made on investment and wealth management websites over the years, as well as news reports, that highlighted strategies to invest the funds for a greater return.
But COSCO BC pushed back on Ms. Bailey’s assertion that the change is “not a revenue measure” for the province, pointing to government projections that show the interest rate hikes are expected to generate $11-million in 2026-27, $23-million in 2027-28 and $34-million in 2028-29.
The group also noted that roughly 30 per cent of B.C. seniors receive the federal Guaranteed Income Supplement, which is calculated annually based on the previous year’s tax return and is reduced with additional income.
Under the new interest rate regime, a cash-strapped senior who needs to withdraw funds from their registered retirement savings to pay their property taxes could see a resulting reduction in their GIS payments the following year, said COSCO BC, which has been working with financial advisors to analyze the changes.
“That where it becomes draconian,” Ms. Gaudette said.
One in four B.C. seniors aged 65 and older lives on less than $24,000 per year, and half on less than $37,000 per year, according to the Office of the Seniors Advocate.
In 2024-25, there were 83,124 participants in the property tax deferment program, with the average amount deferred being $5,369 – a 23-per-cent increase from 2019-20.
Under the old rules, assuming a prime rate of 4.45 per cent, deferring $5,000 annually for 10 years would add $6,738 in interest, for $56,738 total owing. Under the new rules, the same deferral would add $22,445 in interest, for $72,445 total owing.
Despite the changes, BC Seniors Advocate Dan Levitt said the program remains a valuable option for seniors facing financial challenges because the loan is not due until the home sells, offering an advantage over other borrowing programs.
Earlier this month, the City of Pitt Meadows wrote to Ms. Bailey expressing “significant concerns” over the changes, saying the program was a financial lifeline that enabled seniors, low-income households and those on fixed incomes to remain in their homes despite rising costs.
“These changes effectively transform a public support program into a high-cost loan, and we are concerned that many residents will be caught off guard by the long-term financial implications,” wrote chief administrative officer Mark Roberts, on behalf of council, in a May 6 letter.
The letter requested an explanation from the province on how it planned to mitigate the impact on vulnerable residents, and urged the government to enhance communications before this week’s opt-out deadline. Council had not received a response as of Tuesday.
The Canadian Association for Retired Persons, meanwhile, said it is “deeply disappointed” with the changes, saying the program was intended as a “practical aging-in-place tool, and not as a revenue generator for the government.”