This might be a good time to wonder why the ‘absurd’ BC Homeowners Grant still exists

If the new Conservative government plans to re-think NDP-era housing policies and looking to balance the budget, they could start by reassessing an archaic tax that largely benefits wealthy homeowners.

The BC Homeowners Grant gives more than 90% of homeowners in the province a large chunk of change regardless of their needs.

“It’s absurd that we’re giving money to homeowners, many of whom have… mortgage-free homes, and yet we’re not giving it to those who don’t have homes,” real estate consultant Michael Geller told iNFOnews.ca.

For Southern Interior residents living in a property worth less than $2.1 million, the grant knocks $770 off their property bill, regardless of their income. Seniors get more — $1,045.

“This is an example of a tax program that really should be reconsidered completely,” Geller said.

In contrast, those renting in BC and making less than $65,000 a year can apply for a $400 tax credit.

UBC Centre for Urban Economics and Real Estate director Dr. Tom Davidoff said it was a poor use of government money.

Davidoff said homeowners are one of the groups that least need government assistance.

“I don’t know why you would be giving more money to a homeowner than a renter,” Davidoff said. “Why would you be spending money on homeowners when you could be spending more on people living on the street?”

BC is the only province with the homeowners grants (other provinces have different grants) which was introduced in 1957 by W.A.C. Bennett’s Social Credit Party, as a way to encourage homeownership.

Fast forward 80 years, and 67% of British Columbians own their own homes. Across Kamloops and the Okanagan, that number is a few percentage points higher, with homeownership in Kamloops, Kelowna, and Vernon all above 70%.

Of those lucky enough to own their own home in Kelowna, more than 40% of them have paid off their mortgages. Those homes rose so much in value over the last 25 years, making many of them millionaires. The city is eighth in Canada for mortgage-free living; Kamloops 14th.

Geller isn’t discrediting those struggling to maintain ownership and admits it isn’t much of a personal concern, but he questions why BC has the grants at all.

“Why is the province, which is in debt… foregoing a lot of revenue from homeowners, many of whom… are living mortgage-free in expensive houses,” he said.

The retired architect and developer has been talking about the issue for 15 years and says there’s little to no appetite to get rid of it.

“Politically, I’m told… it would be suicide to remove this grant,” he said.

If it’s not going to be scrapped, Geller said it should be reformed based on price thresholds and the median value of a property from region to region.

“I still think it’s wrong, but at least it’s more rational,” he said.

Phil Webb worked side by side with the think tank Generation Squeeze and was the force behind a grassroots movement to have BC property tax deferral scheme changed.

The property tax deferral scheme was being used by the ultra-wealthy as a way to borrow money almost interest-free, invest the money saved and turn a solid profit.

The scheme has since been changed, and Webb thinks the same needs to happen to the homeowners grant.

“If you own a home in British Columbia, you are already privileged. So to be rewarding someone for that privilege seems a little silly,” he said.

Webb said the homeowners grant costs the provincial government about $1 billion a year and should simply be scrapped.

He points out senior homeowners are some of the wealthiest people in the province, but actually get an extra $300 grant.

“Getting rid of it would put a billion dollars back into the pocket of the provincial government…which could be spent more sensibly,” he said.

However, Webb said there is no political appetite, especially for the senior homeowners grant, to change the system.

So for now, BC homeowners will continue to get more government assistance than those renting, even if homeowners are making more money than renters.