Changes to the Property Tax Deferment Program

The BC Provincial Government released Budget 2026, which included proposed changes to the terms of the property tax deferment program.

Background

Many homeowners in BC participate in the British Columbia’s Property Tax Deferment Program, allowing participants to defer paying property taxes on their principal residence via a low-interest rate provincial loan. 

The interest on the deferred taxes is “simple interest”, meaning participants were sheltered from the impact of compounding interest, representing significant savings over time.

Additionally, the interest rate itself has been very low – prime minus 2% under the regular program. 

Key Changes

Budget 2026 introduces significant changes.

Firstly, the program switches to compound interest beginning 2026 and beyond.  This means that interest accrued each month is added to any new deferred tax balance, and the total balance is then subject interest next month. Previously deferred balances remain subject to the original program terms.

The interest rate also changes to prime plus 2% – a 4% increase. 

Changes will apply to both the regular program, as well as the families-with-children program.

The provincial government commented that these changes stem in part from their own borrowing costs exceeding the previous programs’ lending terms.

What’s Next

The budget will now be subject to approval by the Legislative Assembly and necessary changes to meet BC regulatory requirements.

We recommend that you stop deferring property taxes starting in 2026, using existing funds in the bank or from your portfolio to pay annual tax assessments.

If deferring your property taxes was necessary to cover month-to-month expenses, please contact our team to discuss alternative solutions.

Regards,

Ryan Bacchus & Reg Sangha