on February 19, 2026 
We have some important news to share about the British Columbia Property Tax Deferment Program, coming directly from the new 2026 Provincial Budget. If you currently defer your taxes or are planning on doing so this year, please keep reading.
What is Changing?
Property Tax Deferment has been a popular program for many people (especially seniors) because it offered very low interest rates. However, starting with the 2026 tax year, the provincial government is updating the rules to align this program more closely with standard bank loans.
Here are the two major shifts you need to know:
- From Simple to Compound Interest: In the past, the program used simple interest. This meant you only paid interest on the actual tax amount you deferred. Moving forward, the program will switch to compound interest. This means interest will be calculated on both the original tax amount and any interest that has already built up over time.
- New Interest Rates: The way the rate is set is also changing. For new loans, the interest rate will now be the prime rate plus 2 per cent. Previously, these rates were much lower at prime minus 2 per cent. For prime, the government is using the prime rate of their principal banker, which is currently 4.95 per cent.
A Quick Example to See the Difference
To show you how this looks in the real world, imagine you defer $3,000 in property taxes every year for five years. Under the old rules, the interest was very low (2.95 per cent) and you only paid interest on the deferred tax amount. Under the new 2026 rules, the combination of a higher rate (6.95 per cent) and compound interest changes the math quite a bit!
| Year | Total Taxes Deferred | Old Program Total (Simple Interest, 2.95%) | New Program Total (Compound interest, 6.95%) |
| Year 1 | $3,000 | $3,088.50 | $3,215.27 |
| Year 2 | $6,000 | $6,268.11 | $6,661.26 |
| Year 3 | $9,000 | $9,541.52 | $10,354.53 |
| Year 4 | $12,000 | $12,911.49 | $14,312.81 |
| Year 5 | $15,000 | $16,380.88 | $18,555.13 |
After five years, the total amount owing under the new program is almost $2,175 higher than the old version due to the higher interest rate and monthly compounding.
Why the Change?
The government says that these updates are designed to ensure the program remains sustainable for the long term. By moving the terms closer to what you might see at a commercial bank, they aim to keep the program available for those who truly need it most while managing the provincial budget effectively. In other words, they believe many people are taking advantage of the program when they don’t need to, but because it’s more advantageous for them to keep their money in investments and defer their property taxes (effectively borrowing money cheaply from the government while earning higher returns from their investment portfolios).
What This Means for You
If you already have a tax deferment loan from years prior to 2026, those older balances will generally stay under their original terms. These new rules will apply specifically to taxes deferred for the 2026 tax year and beyond.
If you have been deferring your taxes at the advice of your financial advisor, or were planning to do so this year, please reach out to them and discuss whether that plan still makes sense under the new interest model of the program.
Have questions?
We are always happy to discuss your financing needs!
Please book an appointment today with one of our broker team to discuss your plans and we’ll make sure you have all the information you need to make the best financial decision and get the best mortgage to reach your goals.
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