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.
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
- The value of any charges registered against your property
- Your current year taxes
Equity checks may be performed by a third party.
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 residence.
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 property, your property value is based on the land value only. 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.
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.
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.
- Previously deferred taxes under an existing agreement on a different program: refer to your annual Statement of Account
The amount owed when the charge was registered may not be accurate today. If we need more information, we will notify you by mail or email.
If you received an equity letter, it means we’re unable to determine whether you meet the equity requirements. Attached to the letter is a form your lender must complete.
When your lender completes the form, they’re:
- Confirming your equity amount
- Acknowledging they won’t advance more than the amount indicated on the letter while you’re currently on the tax deferment program
- Accepting that we’ll rely on this information to determine your eligibility for the tax deferment program
You must submit the form to us by the due date stated on the letter or your application will be cancelled.
The program does not request priority placement on your property title, nor do we grant it.
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. If your property is held in trust or an executor state, the value of the charge will be the percentage of the property held in trust or executor state.
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
Use our property tax deferment equity calculator to estimate how much equity you have in your property.