Should it be easier to defer property taxes? Seniors advocate wants city to study it

A London seniors' advocate is asking city staff to consider an updated property tax deferment program to help those on low incomes and fixed incomes from being taxed out of their homes.

Don Pollock is with Navigating Retirement, a not-for-profit organization that helps seniors through the financial challenges that can come with retirement. London is currently on pace for an 8.7 per cent property increase next year, pending any further changes during budget discussions set to wrap up at the end of February. 

Pollock said while home values have risen sharply in recent years, so have ownership costs. He said a higher property tax bill could reach a tipping point where some seniors or people living on a fixed income could be forced to sell their home before they'd like to. 

"There's always been an assumption that if you own a $350,000 asset, that you must have the cash to maintain it," he said. "Well in fairness, not necessarily. Housing values have gone up but that money is locked in your home." 

Under tax deferment programs, municipalities allow qualifying property owners to defer some or all of their tax bill until the property is sold. And while it helps with the monthly expenses, such programs typically charge homeowners to offset the cost of running it.

Pollock said in some ways, tax deferrals are similar to reverse mortgages. He also said deferring municipal taxes many not be the best choice for every senior or low-income earner, depending on their situation. 

Seniors hit 'left and right'

The city of Ottawa has a tax deferral program created in 2007. It charges homeowners five per cent interest on the amount outstanding when the property changes ownership. There are other eligibility restrictions. For example, the property owner's income must be less than $50,331. 

Pollock isn't certain Ottawa's program would be a perfect fit for London, but he wants the city to study it. 

"It's becoming more and more of a challenge to maintain a property," he said. "With inflation costs and other rising costs, seniors are being hit left and right."

London has an existing tax deferment program created in 1988 by the province. Its eligibility rules are now out of date and restrictive, making it difficult to qualify. 

The assessed value of the property must be less than $300,000 and the property owner must be on a provincial support program such as the Ontario Disability Support Program (ODSP). 

Also, under the existing tax deferment program, only the amount triggered by a recent assessment increase is eligible for deferral. There were no assessment increases from 2022 to 2024, so no one qualified for those years. 

Also the amount of tax deferred is limited to $100 or 5 per cent of the 1999 property taxes.

There are only two people enrolled in London's current tax deferral program. The highest deferral currently on the books is $4,400. 

A municipal tax referral isn't the only option for older property owners looking for relief from their tax bill. 

The province has a seniors property tax grant administered by the federal Canada Revenue Agency. The maximum annual amount through that program is $500. 

• Ontario senior homeowners' property tax grant

Coun. Anna Hopkins said she'd like to see the city update its tax deferral program considering Ontario's aging population and rising cost of living. 

"We're all going to need some kind of supports with affordability as we age and we're becoming an aging population," said Hopkins. "If the current program is not working, we should fix it."