Understanding property equity

Equity is the percentage of property value remaining after all charges registered against your property and current year property taxes have been deducted from the current assessed value.

When you apply to defer your property taxes, you must ensure you have enough equity in your home. Each tax deferment program has its own minimum equity requirement:

Deferment program	Minimum equity
Regular	25%
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.

Note: If you have a secured debt on your property, such as a mortgage or a line of credit, contact your lender before you apply to ensure your approval into the tax deferment program doesn't conflict with the terms of your loan.

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 (current BC Assessment value)
• The value of any charges registered against your property
• Your current year taxes

Equity checks may be performed by a third party.

Example calculation

Here's how equity is calculated in the following situation:

• The current year's BC assessment value of your property is $500,000 (includes land and improvements)
• Your current year’s property taxes are $2,500 (this amount does not include property classifications 02 to 08 and is after the home owner grant has been deducted)
• Your current outstanding mortgage balance is $300,000 (this amount is 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 overall and not the amount you have spent)

To calculate the equity for the scenario above:

1. Use the BC Assessment value of your property and subtract from it the current year property taxes and each registered charge (the mortgage and the line of credit)
   $500,000 - $2,500 - $300,000 - $10,000 = $187,500
2. Divide this sum by the BC Assessment value and multiply it by 100
   $187,500/$500,000 = 0.375 x 100 = 37.5%

In the scenario above you would have 37.5% equity in your property and you meet the equity requirements for both the Regular and Family with tax deferment programs.

Assessed property value

The assessed value of your property is determined by BC Assessment. The assessed value of your property is shown on the property assessment notice that is mailed to you each year in January by BC Assessment. This notice shows you the assessed value of both land and improvements. Improvements are any buildings on your land, such as your residence.

Other appraised values are not accepted.

Fire insurance

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 property, your property value used for calculating equity is based on the land value only.

Important: Manufactured home owners who do not own land and do not hold a current fire insurance policy will not qualify for the tax deferment programs.

Registered charges

You may have charges with a dollar value registered against your property at the Land Title Office or the Personal Property Registry (if you own a manufactured home). Contact your lender prior to applying to ensure your approval into the tax deferment program doesn’t conflict with the terms of your loan.

Examples of charges that may be registered against your property and how you can determine their value include:

• Your mortgage(s): check your latest mortgage statement to find out the current outstanding mortgage balance. Use that balance as the value of the charge.
• Line(s) of credit: check your latest line of credit statement to find the overall credit limit. Use that credit limit amount as the value of the charge.
• Combined mortgage(s)/line(s) of credit: check your latest mortgage statement to find the overall credit limit. Use that credit limit as the value of the charge.
• Previously deferred taxes under an existing agreement on a different program: check your annual Statement of Account mailed to you in May of this year.

The balance of a charge may be different today than when it was registered against your property. If we need more information from you, we will notify you by mail and email (if provided). The completed form(s) must be submitted to us by the due date stated on the letter. Applications will be cancelled if we do not receive the requested information. You may re-apply on a new application online up to December 31 of the current year, however late payment penalties will apply if it’s after your property tax due date.

If you receive an equity letter from our office, you will need to contact the lender(s) indicated in the letter(s) and request them to complete the form included in the letter. Once the form(s) are completed, either you or the lender can email us the documents. Our contact information is on the letter. This information must be received by our office on or before the due date stated on the letter. If you require more time or the lender needs assistance completing the form, contact our office prior to the due date. Information received after the due date will result in your application being cancelled. You may re-apply online up to December 31 of the current year. Late payment penalties will apply if it is after your property tax due date.

If you have an inter-alia mortgage (for example, your mortgage is secured by more than one property) to calculate the equity for the property you applied to defer your taxes, we use the total registered value across all properties. If your property is held in trust or by an executor, the value of the charge will be the percentage of the property held in trust or by the executor.

Charges registered under the Family Law Act or Family Maintenance Enforcement Act will be reviewed on an individual basis. Contact us for more information before you apply.

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

To estimate how much equity you have in your property, use our property tax deferment equity calculator.