The Provincial race is unofficially launched as Premier Gordon Campbell has come out with a four point plan that if it could be summed up in a single word then I’d call it unorthodox.
First he is messing with the rules of the RRSP allowing those over 71 years old to keep them going and not realize the hit that the markets have taken recently. This makes so much sense in so many ways. As a population we are living longer, working longer, and I see no reason why the RRSP should have any imposed date for expiration. When a 72 year old can run a presidential campaign for about two years (OK, not every 72 year old is so spry) it’s time to end limits all together.
Second, he wants to freeze the property tax assessments at 2007 levels. This is a wise move. Now before a bunch of people say upon opening their property assessment statement that their home has dropped in value realize that you have actually just been given a technical break. That assessment is supposed to reflect the value of the home had it sold in June of the prior year (so for your assessment received in 2009 that would reflect June 2008′s price). There is no doubt that for the vast majority of people out their June 2008′s price was higher than June 2007. The peak has, so far, shown to have occurred in May of 2008. Prices have come down since then and have, for many, fallen below 2008′s assessment (reflecting a sale from June 2007). But that is today. Guess what? If prices continue their downward trend you will get a lower assessment in 2010. But for tax 2009 you are getting a break. And not that it really matters since the amount of taxes you pay are not so much dependent on your assessment but on your city’s need divided amongst all the homes and their share of wealth. If everyone’s home went up your taxes do not. Your taxes only go up when the city raises taxes collected. Clear?
Third, and this is putting some serious bearish concerns in my mind, Premier Campbell is proposing that those with over 15% equity in their home be allowed to defer their property taxes for up to two years, 2010. Why? Just to be nice? To be electable? To get British Columbians to go buy that third car, take a vacation to Tofino, spend the money on building a laneway house? Or is it more to help those who own homes but have fallen on hard times as mills have shut down, companies start downsizing, and savings have been wiped out, keep their homes rather than fall into a potential default on their taxes (which could lead to the loss of their home and a tax auction thereby lowering home values and… well, where does the tailspin end)? If I’m being overdramatic on this let me know… I just do not get the idea of the government playing nice on the collection of taxes.
Give Campbell and his Liberals lots of credit for what they have achieved over the years and you could surely lambaste them for their failures. It’s hard to be perfect and please everyone, but the alternatives are pretty, frankly, sad. But that is not the point of this post. I would like somebody to explain to me the reasoning behind the third point above, tax deferment.
Vancouver, BC 