New Steps to Help Homeowners, Seniors & Rural Residents

Nov. 1, 2008

Click here to download full audio of the Premier's Keynote Address

“Our government will act to provide new stability for homeowners who are worried about fluctuating property values, and give new options to property taxpayers who are facing economic hardship,” Premier Campbell said. “We will also urge the federal government to help seniors make the most of their investments in RRSPs before being forced to draw them down as Registered Retirement Income Funds. We will move to help rural residents and construction workers with a 20-fold increase in funding for improvements to rural resource roads over the next 18 months.”

New help for homeowners

Property assessments locked in: The Province will lock in the property assessment roll for one year to create certainty for homeowners, businesses and local governments.

“We know that property values have fluctuated widely since assessments were conducted last July,” said Premier Campbell. “To avoid confusion, anxiety and unnecessary assessment appeals prompted by higher-assessed property values that do not reflect current market conditions, we will lock-in B.C.’s assessment rolls at 2007 assessed levels.”

This measure will provide time for markets to stabilize and reflect proper market values so property owners know how much they will pay in property tax and local governments know how much they will collect to provide services. It will help municipalities who otherwise might be forced to make significant adjustments to mill rates and protect homeowners whose assessments would be higher than the market value of their homes. This will not apply to new homes that have not yet been assessed. This will not affect municipalities’ ability to set their own mill rates.

Temporary property tax deferment program: The Province will create a new, temporary property tax deferment program. The program will allow people with at least 15 per cent equity in their home, who attest that they are experiencing serious financial difficulties due to current economic conditions, to defer their property tax payment for each of the next two years. Homeowners will not have to pay the deferred taxes until they sell their home, but can pay the Province back earlier if they choose. The Province will charge interest at the prime rate on the balance outstanding on the tax deferment loan, while ensuring local governments receive property tax revenues. This will help homeowners who would otherwise have to try to qualify for a home equity loan during the current credit crunch.

This new program is in addition to the current program, which benefits homeowners who are 55 years or older. The program will not impact the provincial budget because it is considered a secured loan. It does affect taxpayer-supported debt to the amount that it is drawn down. Administrative costs to the program will be minimal.

New help for seniors

Protection of RRSPs from creditors: The Province will act to protect from creditors RRSP investments that are made with banks, just as they are protected now with insurance companies. The Province will introduce legislation to exempt RRSPs and similar prescribed plans from seizure by creditors. Currently, investments with insurance companies are protected from seizure. This will provide the same protection for RRSPs invested in banks. The current law is unfair, as pension and insurance products that are essentially identical to RRSPs are exempt from seizure. It will also end the inconsistent treatment of RRSPs under provincial law and federal law.

A special national meeting on RRSPs: At the upcoming First Ministers’ meeting Premier Campbell will ask that a special national meeting on RRSPs and Registered Retirement Income Funds (RIFs) be convened to review and amend federal law so people are not forced to convert their RRSPs at age 71. That would mean people could save beyond age 71 and continue to receive tax benefits for purchasing RRSPs. Currently, people who turn 71 are forced to convert their RRSPs and are not able to continue investing in RRSPs.

“These are unprecedented times for people in or entering their retirement years,” said Premier Campbell. “We know people’s RRSPs have been hit by the market downturn and those values won’t recover until the market recovers. We should act to give seniors the choices they need to let their RRSPs grow back to pre-September levels.”

New infrastructure investments to support rural residents

The Province will increase funding previously earmarked for resource road maintenance and rehabilitation by more than 20 times to $20 million. Work will be carried out over the next 18 months. Premier Campbell also announced work would be accelerated on key transportation corridors including the Cariboo Connector, improvements to Highway 3, Highway 16, and the Trans-Canada Highway, and decommissioning the toll plaza on the Coquihalla Highway.

A number of these measures will be subject to legislative approval.