Understanding Property Equity
Equity is the percentage of property value remaining after all charges registered against your property and current year taxes have been deducted from the current assessed value.
|Deferment Program||Minimum Equity|
|Families with Children||15%|
If you already defer your property taxes and plan to defer your taxes in future years, you must maintain the minimum equity in your property.
How we verify the equity in your home
We use the following information to determine how much equity you have in your home:
- Your property’s assessed value
- The value of any charges registered against your property
- Your current year taxes
If we don’t have enough information to verify your home’s equity, we'll send you a letter requesting information from your financial institution by a given due date.
Here's how equity is calculated in the following situation:
- The current BC assessment value of your home is $500,000 (includes land and improvements)
- Your current year’s taxes are $2,500 (after the home owner grant has been deducted)
- You have an outstanding mortgage balance of $300,000 (you can find this amount on your mortgage statement)
- You have a line of credit registered against your property with a credit limit of $10,000 (use the credit limit amount, not the amount you have used)
To calculate the equity:
- Subtract the current year taxes and each registered charge from the assessment value of your home ($500,000 – $2,500 - $300,000 – $10,000 = $187,500)
- Divide this amount by the total assessed value and multiply it by 100 ($187,500/$500,000 =.375 x 100 = 37.5%)
In this example, you would have 37.5% equity in your home and you would meet the minimum equity requirements for either one of the tax deferment programs.
The assessed value of your property is determined by BC Assessment. You'll find the assessed value of your property on the property assessment notice that was mailed to you in January by BC Assessment. This statement shows you the value of both land and improvements. Improvements are any buildings on your land, such as your home.
Other appraised values are not accepted.
For the purpose of calculating equity, your property value is based on the assessed value of both land and improvements. However, if you don’t have fire insurance on your improvements, your property value is based on the land value only.
Here's a list of some charges that you may have registered against your property and how you can find out their value:
- Your mortgage(s): refer to your latest mortgage statement to find out the outstanding balance. Use that balance as the value of the charge.
- Line(s) of credit: refer to your latest line of credit statement to find the overall credit limit. Use that credit limit as the value of the charge.
- Combined mortgage(s)/line(s) of credit: refer to your latest mortgage statement to find the overall credit limit. Use that credit limit as the value of the charge.
- Outstanding property taxes previously deferred under your principal residence: refer to your annual statement of account
The amount owed when the charge was registered may not be accurate today. We'll request the current information, if necessary.
If you have an inter-alia mortgage (meaning your mortgage is secured by more than one property) we'll use the total registered value across all properties in our equity calculation on the single property you're applying on.
Charges registered under the Family Law Act or Family Maintenance Enforcement Act will be reviewed on an individual basis.
All charges registered against your property plus the amount of taxes you want to defer can’t leave you holding less than the minimum equity for the deferment program.
Estimate Your Equity
Use our property tax deferment equity calculator to estimate how much equity you have in your property.