Financial tipster asks residents to question the fairness of property-tax sale
A financial advocate has issued a report on B.C.’s property-tax sale, but warns that changes are needed to reduce the burden on both homeowners and Vancouver renters.
“I’ve seen seniors lose their homes and see the value of their property decrease 100 per cent overnight,” said Mary Kirkpatrick, one of the report’s authors and an analyst at Tax Help B.C. “So they don’t have the cash flow to make up the equity that they lost.”
One in eight B.C. homes sold during last year’s tax sale cost the same amount of money as they had before they were sold.
The report for the Real Estate Foundation of B.C. was released on Monday, in the midst of Vancouver’s real estate market woes.
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Kirkpatrick said that while the report doesn’t make recommendations for how to fix the problem, it includes strong recommendations for better funding for real-estate tax enforcement.
“If somebody breaks the rules … they should be taken to task,” she said. “There are policies and procedures in place that need to be enforced.
“Unfortunately, that doesn’t happen.”
The report found that the province can’t afford to hire more full-time tax enforcement officers without a significant increase in funding.
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A department spokesperson said Tuesday that it’s working to improve its enforcement abilities and increase service levels.
“Our previous spending levels for tax enforcement were well below what we consider to be best practice for many jurisdictions,” said spokeswoman Danielle Goddard.
“We are currently reviewing whether our existing staffing levels will be sufficient to provide adequate tax compliance and enforcement resources, as well as improved service delivery levels, in the near future.”
The report estimated that there was between $1.7 billion and $2.7 billion in potential savings if those who didn’t pay their real-estate taxes in full were charged a lower value on the amount owed, including taxes owed.
The homeowner said she was debt-free when she paid off her loans with 30 per cent interest rates over 18 years.
Now she and her husband will have to sell their home to repay more than $250,000 in taxes, rent, renovations and other expenses.
“I am, with this whole process, in a lot of stress right now,” said the woman, who asked to be called Grace.
Her daughter-in-law, who lived with them, helped them reach their home equity in part by saving money in her RRSP account. The woman said she didn’t have other family available to help with such a large loan.
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Kirkpatrick said high-value homes in some cases lost more than 90 per cent of their value in the course of the sale. She described the process of clearing out properties in Vancouver as “drastic.”
“The devastation you see in this group is extremely traumatic,” Kirkpatrick said.
“I was really struck by the one in 10 because that really jumped out to me.”