The New Brunswick government is spending $ 14 million to partially lower 2022 property tax bills on apartment buildings and commercial properties that have been affected by valuation increases of more than 10% this year.
The decision reverses a previous government position of providing relief only in the form of tax rate cuts this year and comes after weeks of intense pressure from homeowners and other business owners.
In some cases, combined with municipal and provincial tax rebates that have already been granted to commercial properties, it promises to reduce property tax bills for some current buildings below what they paid last year.
“Our government has heard from people and the business community that we need to address the high tax burden in New Brunswick and the cost pressures they face,” said Finance and Treasury Board Minister Ernie Steeves in announce the help package.
The 50 Cameron Street building in Moncton is one of 77 properties owned by Killam in New Brunswick. He is eligible for a $ 15,000 property tax rebate according to the valuation changes announced by the province. In addition to the tax rate cuts made by Moncton and the province, the building will pay less tax in 2022 than in 2021. (Pierre Fournier / CBC News)
Tax breaks will be great on some properties, but they have some restrictions.
They do not apply to rental properties with less than four apartments. Nor do they cover property owners who activated their own higher taxes and tax bills by buying rental or commercial properties at high prices in 2021 or by substantially renovating properties last year.
The rules mimic the “peak protection” of appraisals that New Brunswick homeowners have had since 2013. Under these rules, substantial increases in home appraisals must be implemented for two or more years at a maximum. of 10% per annum.
For example, a sudden 30% increase in one year takes three years to fully apply to a homeowner’s tax bill.
The rental and commercial property program will mostly reimburse municipal real estate taxes levied this year on buildings with high tax increases. It is paid for by the province because local governments set their budgets months ago
“This program will be fully funded by the provincial government and will not affect local government property tax revenues,” a government press release said.
Kit Hickey with the nonprofit Housing Alternatives in Saint John welcomed the initiative.
“What it means is that we can ensure that these housing units remain affordable for the residents currently living there,” Hickey said.
Housing Alternatives owns several rental properties, several of which had large valuation increases this year. A 12-unit building owned by Lauder Court that had a 20% increase will be entitled to a $ 870 discount under the new policy, or about $ 72 per apartment.
“As long as our costs don’t increase, we won’t increase rents.” said Hickey.
But the biggest beneficiaries will be large rental companies such as Killam Real Estate Investment Trust, the largest owner in New Brunswick, based in Halifax.
New Brunswick Prime Minister Blaine Higgs said a program to reduce $ 14 million in property taxes on commercial and rental buildings is aimed at encouraging new construction, even though the program only pays money to existing buildings. (CBC News)
In a financial statement last month, he said he received “an average 15 per cent increase” in appraisals of his New Brunswick properties, which include 77 properties and 5,073 apartments.
Her Moncton Cameron Street shopping and apartment complex received a 20% increase in valuation and will only be entitled to a $ 15,000 property tax rebate under the new policy.
Combined with the property tax cuts approved earlier this year by both the province and the city of Moncton, this will reduce Killam’s tax bill on the Cameron Building to $ 166,000 in 2022, slightly below which paid off in 2021.
New Brunswick Prime Minister Blaine Higgs said additional relief was needed to encourage homeowners to continue building apartment buildings, although the rebates are specifically for existing properties and do not apply to new units. construction.
“It was another way for apartment owners to stay really focused on building new units,” Higgs said.
“What we’re proposing is to deal only with ‘OK, how do we get people to invest so we can get more housing on the market.'”