Interest Rates on Deferred Property Taxes

For B.C. seniors who defer their property taxes, The BC Budget 2026 announced a significant change to the Property Tax Deferment Program.

Rather than offering below market (and subsidized interest) on deferred property taxes, homeowners who defer property taxes in 2026 and later years will be charged interest at the rate of prime plus 2%. Interest will be compounded monthly, meaning that it will be calculated on the deferred tax loan balance and accumulated interest added each month. This means it will be at least 4% more expensive.

For property taxes deferred in 2025 and earlier years, interest rates will continue be charge at prime minus 2% and set on April 1 and October 1 each year. The interest charged will be simple interest, not compounded. BC homeowners who deferred property taxes in these years will not be affected by the proposed changes.

As a result, Homeowners who could afford their property taxes but were taking advantage of low interest rates may prefer to pay their 2026 property taxes on time and opt out of any automatic renewal of their property tax deferment account. For more information visit: Interest and fees for property tax deferment - Province of British Columbia

Going forward, the terms of the property tax deferment program have fundamentally changed to resemble a reverse mortgage, and may be more expensive than some loans offered by banks. The cumulative effect of compounding interest will eat into home equity at a much faster rate.

To prepare for these changes with prudence and without sacrificing quality of life, contact your tax and estate planning lawyer to review your estate plan.

‍