Seniors in Alberta can now postpone paying their residential property taxes until they move out or sell their home.
Seniors in Alberta can now postpone paying their residential property taxes until they move out or sell their home.
The new Seniors Property Tax Deferral Program allows homeowners 65 and older to defer all or part of their taxes through a home equity loan provided by the Alberta government.
The loan has to be repaid once the homeowner moves out.
“It will free up several hundred dollars a month for (seniors) to spend as disposable income and do whatever they need to do to continue meeting some of the increasing costs,” said Dick Tansey, vice-president of the board of directors for Alberta Seniors United Now.
Tansey met with George VanderBurg, Alberta Seniors Ministry associate minister, and John MacDonald, executive director of SUN, at MacDonald’s home on Monday morning to announce the program.
MacDonald was also one of the first to sign up for the loan.
To apply, homeowners must be 65 years or older and have a minimum 25 per cent equity in their home. The home must also be the senior’s primary residence.
MacDonald said the program is voluntary and will not leave a debt to the family or children. As soon as the house is sold or transferred to another owner, the loan has to be paid back.
That money will be taken out of the property value.
He added that many seniors on a fixed income have limited money to spend.
Freeing up a few hundred dollars a month will not only help them pay the bills but also keep their independence.
“Seniors don’t want to go into care facilities because for most seniors it’s not a good place for them and they don’t get a lot of choice, they have to go where space is available,” he said.
“And this is one way of helping.”
He stressed that the program would not cost Alberta taxpayers a single cent as administrative costs are covered by a low interest rate of three per cent. That’s about $30 for a loan of $1000.
With the value of homes expected to increase by two to three per cent a year, that tax should be covered, MacDonald said.
In a press release, the government said it expected to free over $50 million for more than 23,500 senior households.
That will leave each senior applying for the loan with $2,000 or more per year, based on his or her property tax.
VanderBurg added the interest rate is not expected to go to two-digit numbers anytime soon.
The rate is reviewed every six months and seniors are always welcome to opt out of the program, he said.
“It’s a voluntary program and if the interest rates don’t match the needs of these seniors you don’t have to defer,” he said.
“The interest rate will be reviewed on a regular basis by the treasury board but people always know well in advance what prime is.”
Tara Burnett, outreach co-ordinator at The St. Albert 50+ Club, said property taxes are a deciding factor for many seniors when moving out of their home.
Most seniors want to stay home as long as their health allows them to do so. That being said, she worries that recent news of cuts to homecare services will impact their independence in other ways.
“Just because they can afford it doesn’t always mean that they can stay there if they don’t have the support of someone helping with yard work or housekeeping or some other medical issues,” she said.
VanderBurg said the government is not cutting any funds to the homecare program in the budget but adding to it.
