If homeowning seniors pay less property tax, who will pick up the bill?

Résumé détaillé

Having a paid-off house doesn’t eliminate the need for residents to have roads repaved or garbage picked up

Across North America, seniors are fighting to defer or reduce their property taxes. Their anger is understandable, since property taxes in Canada are rising almost three times faster than inflation during a cost-of-living crisis, but their victories could mean higher taxes or reduced services for the rest of us.

Taxpayer revolts against property taxes are not new – voter backlash in California led the state in 1978 to adopt Proposition 13, which limited property-tax increases and eliminated reassessments until the time of sale, permanently distorting the state’s real estate market. Those measures, however, applied to all homeowners, regardless of their age.

As baby boomers get older, the percentage of homeowners who are seniors is also increasing. In Canada, it surpassed 30 per cent for the first time ever in the 2021 Census.

The growing number of seniors, coupled with their propensity to vote, creates the conditions for seniors-focused property-tax policies, with Indiana Governor Mike Braun floating the idea of full property-tax exemptions for seniors.

Advocates of such an exemption argue that if you own the house outright, without a mortgage, the home is fully yours and you should not have to keep paying for something you already own.

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This argument, which has spawned a thousand Facebook memes, ignores that having a paid-off house does not eliminate the need for residents to have roads repaved or garbage picked up – services that are covered by property taxes.

These same political pressures exist in Canada, but to date, the measures proposed and implemented have been far more modest, involving rebates such as Ontario’s Senior Homeowners’ Property Tax Grant or low-to-no-interest property-tax deferrals.

The number and scope of these policies continues to expand, with Alvin Tedjo winning the recent Mississauga mayoral race on the back of a promise to freeze property-tax rates for seniors, and the…

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