The senior tax deferment program is not a pro bono charity– it is a deferment option akin to a reverse mortgage, but at much better rates. As I commented earlier, absent some proof the program is illegal, immoral or fattening to some more deserving group, I have no objection. As a pragmatist, I prefer to look at the results, as opposed to economic theory or political philosophy. Does the program work? Are there adverse effects? Do you know? If so, please share with us. Heck, if it's a senior scam run by a shady government, we can hop the bus tomorrow and protest at the Minister's office (you bring the posters, I'll bring the markers).

While I agree the inefficiencies of government make for poor management of virtually everything it touches, and private business normally does a better job, the fact is, if there is no private source for this relief (people/culture), the government program is better than nothing, or, worse than nothing, some predatory lender looking to make a vintage buck.

“Kindness, compassion, when regulated by law, removes both the responsibility and the personal benefits of the warm fuzziness that comes to us from just doing the right thing because it's the right thing to do, as opposed to having to the right thing because it's the law…”

I know of no law that regulates kindness, unless you so interpret the criminal statutes against assault and battery, burglary, murder, mayhem, and curbing your dog.

Now I'm all warm and fuzzy.

Except. Let's not confuse “a people” or “a culture” with a government. Let's just not do that. Oh yes, sure, we can do it, and we do, but it's never a good idea to look at the government, or a governing body- in the case of pro bono suggestions- and say to ourselves “Hey! That defines me. That's how I roll.” We should help out folks who need help, but to have the government regulate is a different animal entirely.

Kindness, compassion, when regulated by law, removes both the responsibility and the personal benefits of the warm fuzziness that comes to us from just doing the right thing because it's the right thing to do, as opposed to having to the right thing because it's the law… blah blah blah… Howdy Larry!

As you realize, one of the reasons for the program is to allow seniors to stay in the neighborhoods where they have formed strong attachments. I'm not a psychologist or doctor but I would venture a guess the uprooting of seniors from their long established homes might be detrimental to their mental and/or physical health– which renders a cost to society.

Also, the money saved in deferred taxes is likely used in the local economy, where the benefits of a free market system are more apt to be realized than in those tax dollars otherwise paid to government. In the end, for me, it just feels right.

A test of a people is how it behaves toward the old. It is easy to love children. Even tyrants and dictators make a point of being fond of children. But the affection and care for the old, the incurable, the helpless are the true gold mines of a culture. Abraham Heschel

Jf-you are correct in asking where “these people” aka seniors will go. This is a serious concern for our society today. If a senior can stay in their home because their tax burden is deferred, more power to them and to our society.

Rob, I wonder how old you are and if you have parents or relatives who are confronting the crisis of where to live as they age. I have countless friends, family, and clients who are dealing with seniors and their living arrangements in different municipalities all over the country. It ain't easy and it is not a simple problem. But come on, give seniors a break!

“Working owners are in fact paying higher taxes, if we assume that the government does not cut spending to take account of the lost current revenues from the Senior Tax Deferment program. Someone has to pay for it.”

Yes, that would be an assumption. But even if the gov't were operating at a deficit or would require the raising of taxes to cover the shortfall from senior tax deferments, one group would not bear that burden over another– as far as I know, the property taxes are uniformly assessed based on home value, not age or employment of the owner. So, in fact, any increased taxes would affect the entire tax paying group and not just working owners (we already covered the case that seniors may, in fact, be working owners)

“…deferring property taxes would create a real incentive for seniors to hold on to housing they otherwise would have sold.”

I agree, but it that a bad outcome? I don't know, but I don't think so. As I see it, if they would otherwise not have sold, the result is a “forced” sale by these seniors. Forced sales lead to sales below market value. That seems to me an unfair deal to these folks who have built up equity in their homes and contributed to the community over the years– at least w/ the deferment, a sale could be made at FMV. And would not the lower sales prices, in turn, drive down the values of other homes in the area?

And if the seniors sold, where would they go? To a rental? Would they then be raising the demand for rental housing, leading to higher rents, given current supply, thereby adversely affecting not only other seniors but young families who must rent. In the end, someone always pays. The question is perhaps seniors may have earned the right to get the break.

PS: School taxes are a part of my property taxes here in PA. If they are a part of BC property taxes, the herring is pickled and seniors maybe ought not be subsidizing (paying, not loaning) the taxes of homeowners with children.

As always, a delight to discuss with you, rsh.

Working owners are in fact paying higher taxes, if we assume that the government does not cut spending to take account of the lost current revenues from the Senior Tax Deferment program. Someone has to pay for it.

School taxes are a whole other can o' worms, frankly, as that raises the whole question of whether property taxes are the appropriate way to finance government schools. For that matter, it raises the question of whether government schools should exist in the first place — and if they should, then whether there should be price-based competition for such schools (via vouchers and the like).

So I consider that a red herring in this particular discussion.

At the same time, if property taxes are too high in order to support government schools, then a senior can justly decide to sell the house to a young family with children (who would gladly pay those taxes) and move to an area with lower school taxes (or none, as some seniors-only developments have). Deferment of taxes would defeat precisely this motivation to sell and move, resulting in lower supply in the market, which in turn drives up the price of housing.

-rsh

Since homes are taxed based on their value, and not age or employment of the owner (value of the owner?), I disagree the working owners are paying higher taxes by virtue of the program. In addition, we cannot conclude seniors who must defer taxes are unemployed– many of them may still be among the working class of British Columbia.

Consider that “school taxes” are often a part of the real estate tax package. Since seniors have already put their children through the school system (and paid their taxes w/o deferment), their continued payment of those taxes puts them in the position of subsidizing the younger families currently putting their children through school. In such case, the idea is indeed a bad one– seniors taxes should be justly LOWERED to the extent of any school taxes in the mix.

If studies have been made relating to the program's effect, I am unaware of them. Perhaps the author may shed some light on the consequences and the imagined road to hell may be paved in yellow bricks.

Forgive my impertinence, but… this has to be one of the worst ideas I've ever seen posted on Sellsius, even by a guest blogger.

So we're going to import socialism from Canada?

Has there been any studies on impact of these tax deferments on market transactions, or market prices? When the taxpayers (aka, the “province” — it isn't their own money the “province” is spending, but the taxpayers who live there) subsidize the homeownership of elderly people who apparently should have been moving out years ago, what is the effect on the local real estate market?

Restricting supply necessarily means higher prices if demand stays constant. So not only are the working families of British Columbia paying higher taxes so that old people can stay in homes they can not afford otherwise, but they end up paying higher home prices because the supply is restricted.

What a fantastic idea! NOT.

The free market works when it is allowed to work. These policies may be well-intended, but you know what they say about the road to hell….

-rsh

Yes, they do still have to pay the taxes.