The property tax deferral plan announced recently by Premier Gordon Campbell will certainly help British Columbians feeling the crunch of the recent market meltdown. The good part of the plan is that it is aid, not simply a handout.

Those who can’t cover their property tax bill next spring will be able to defer it for up to two years, as long as they have at least 15 per cent equity in their homes. The deferral will amount to a loan from the B.C. government, subject to interest at the prime rate. As mentioned, this isn’t simply a handout, it’s a deferral of taxes owed.

Homeowners in communities hard-hit by the financial crisis will certainly benefit from the plan. It gives those in financial trouble some breathing room before being faced with the spectre of losing their homes. The onus is still on homeowners to deal with their financial problems in the interim i.e. find a different job, get some retraining.

While the tax deferral plan is a good one, Campbell’s announcement the province is going to freeze property assessments as well is puzzling. Freezing property assessments at 2007 levels doesn’t help anyone. In fact it could be detrimental to some property owners. And, in turbulent times having a more accurate accounting of the value of your property is a good thing. Putting one’s head in the sand is not the right approach.

The first point to make is that the amount of tax you pay is determined by government. Your property assessment is only a vehicle governments use to determine the mill rate ­ — how much they charge per $1,000 of assessed value.

For example: Let’s say we have a community with two houses in it. One is worth $100,000 and the other $500,000. As a municipal government we decide we need $600 to operate for the year. We would then set a mill rate of $1 per $1,000 of assessed value. The owner of the $500,000 house would pay $500 in taxes and the owner of the $100,000 house would pay $100.

If your city council, regional district board, or provincial cabinet wants to take more money out of your pocket next year, it will, regardless of whether your property assessment goes up, down or stays the same. So, freezing property assessments doesn’t mean your taxes won’t go up. And, as a homeowner, it gives you no relief on any taxes. So why are assessments being frozen?

Probably because it sounds good.