Housing Subsidies for Multi-Millionaires - and Some Billionaires

This article was researched and written by guest author Phil Webb. His views in this article are aligned with, but independent from, Generation Squeeze. Phil is Vancouver born and raised, where he lives with his wife and children in a cramped apartment while working in the insurance industry. He belongs to no political party, or industry lobby. 

Housing affordability is a serious problem in BC where housing prices have skyrocketed relative to wages. Many people criticize our property tax regime, claiming it unfairly burdens youth at the benefit of older homeowners who are already very wealthy. Municipalities increase development fees to raise revenue from new owners in order to keep property taxes artificially low for entrenched incumbent homeowners.

Every homeowner in BC gets a $570-$770 tax credit for their principal residence, but those age 65+ receive a more generous $845-$1,045. However, there is another housing subsidy enjoyed by older homeowners that does not get enough attention - and has more negative consequences: the deferral of municipal property taxes.

The British Columbia government allows anyone over 55 years old to defer paying the municipal property taxes on their principal residence. Created in 1973, the province provides a heavily subsidized loan to the homeowner. The loan is below Bank of Canada prime rate, it doesn’t compound annually, and is paid back with the tax-free proceeds from the sale of the home.

This is a very generous benefit. It was intended to help house rich/cash poor people free up housing equity and encourage elderly residents to “retire in place”. Many people in BC struggle with housing costs, and many under 40 will never be able to afford a home. Meanwhile, older homeowners have benefited tremendously over the last 25 years. Their net worth has skyrocketed due to their gains in housing wealth.

While the subsidy may have made sense in 1973, today most beneficiaries are now multi-millionaires. There is a good argument either to end the subsidy or restrict eligibility to only those who are in need.

There are many negative outcomes of this subsidy. The program encourages people to “retire in place” - or said another way, it “discourages downsizing”. Many wealthy neighborhoods are now de-facto retirement communities, with schools running at half capacity. This program is also tying up lots of taxpayer money that could be better spent. But the most perverse outcome is the majority of recipients are very wealthy.

With an aging population and skyrocketing housing prices, the program has grown rapidly. In 2016 there were 36,000 homes subscribing, tying up $598M of taxpayer resources. In 2024 the Provincial government provided subsidized loans to 85,000 homes, a 136% increase since 2016. The program currently ties up $2.4B. In comparison, the George Massey Bridge is estimated to cost $4B. Broadway metro line is about $3B. Furthermore, the subsidy is cash flow negative. The homeowner receives a loan below market rate, leaving the taxpayer on the hook for the difference. The program is neither sustainable nor responsible.

With 85,000 homes benefiting, almost 1 out of every 20 homes in BC participates in the program. In comparison, the City of Richmond has 85,000 homes. Many of these are multi-bedroom with only one or two occupants which is highly wasteful in such a tight housing market.

All other provinces have similar programs, but BC’s is the most generous. All other provinces begin eligibility at 65 years of age (60 in Que) whereas residents of BC qualify at 55. BC also provides the lowest interest rate; in 2025 it was 3.45% and is expected to be 2% for 2026. Between 2020-2022 it was 0.25% non-compounding; the closest thing possible to “free money”.  

Every other province except Alberta has eligibility criteria to prevent the wealthy from benefiting. Quebec, Ontario, Saskatchewan, New Brunswick, PEI, and Nova Scotia qualify beneficiaries based on income. Manitoba excludes homes over $300,000 from their program. Because BC has refused to implement any means testing, not only is the typical beneficiary very wealthy, but there are some extremely wealthy households receiving this subsidy.

A deeper dive will demonstrate just how flawed this subsidy program is. My numbers are not to be taken as gospel, but the work was reviewed by Jens von Bergman of mountainmath.ca  

Residents of West Vancouver are most likely to be exploiting this subsidy, with about 14% of homes deferring their property taxes in 2024. That’s about  1 in 9 homes, almost 3 every block. The average value of a home in West Vancouver receiving this subsidy in 2024 was $3.96M.   

In 2024, the City of Vancouver had 9,887 homes receiving this subsidy. That’s the same number of homes in the City of Ladner. The average price of a home in Vancouver is $1.2M, whereas the  average home receiving the subsidy is $3.35M.

These numbers show this subsidy is being showered on the wealthy. In each city studied, the average home receiving the tax deferral subsidy is higher than the price of an average home.

*pulled from Google AI

Because of BC's refusal to implement any means testing, not only is the typical beneficiary very wealthy, but there are also examples of extremely wealthy households receiving this subsidy. We found 8 mega-mansions on the illustrious Point Grey Road, and 4 luxury waterfront estates on Bellevue Ave in West Vancouver. 7% of the most expensive homes in BC are exploiting this subsidy. The residence at 1188 W 55th Ave in Vancouver sits on a 1 acre lot. It has a tennis court, pitch & putt practice range, pool/spa, 15,000 sq feet, 6 bedrooms, maid’s quarters, beautiful Japanese garden, an elevator and a 7 car garage. And the BC government is using your taxpayer dollars to subsidize his housing.

There are many policies and programs our governments pursue that drive up housing prices. However, unwinding these programs face legal, legislative, constitutional and political headwinds. While governments are correct to increase supply, it will take years (possibly decades) to catch up with demand and for prices to normalize. However, the Property Tax Deferral subsidy could be ended tomorrow. It is a simple change to property tax policy. It is run by the Ministry of Finance and could be ended if our Minister of Finance, The Honorable Brenda Bailey ordered it so.

The housing market, demographics and financial markets have changed since 1973. Every bank in Canada has a product to free up housing equity so there is little need for government intervention. There is a benefit for people to remain in their family homes and communities, and moving sucks most of the time, at any age. But the cost should be borne by those who benefit, not by taxpayers who struggle with housing, or who are priced out of the market.  

Premier David Eby has issued a mandate to the Ministry of Finance to “to review all existing government programs and initiatives to ensure programs remain relevant, are efficient, grow the economy, and help keep costs low for British Columbians.”

This subsidy is not efficient. It is a net cost to the taxpayer and most people receiving it have ample wealth to pay their taxes. It is not relevant either, because the market now provides many ways to access housing equity. This subsidy is not making things more affordable for BC families, and does little to grow the economy, while delivering a benefit to many who enjoy high-value homes. There is a good argument to terminate the program - or at least restrict the wealthy from benefiting.

Governments are more likely to respond to public pressure. Please write to Brenda Bailey’s office at [email protected] to make your voice heard. 

Want to learn more? Check out the Vancouver Sun's coverage on this issue:

How B.C.'s property tax system delivers big benefits to multimillionaires, and why some say it needs to change