The leader of the province’s apartment owners’ association said increases in property tax assessments would leave landlords worse off, despite a reduction in the province’s property tax.
Meanwhile, a tenant rights activist says a one-year rent ceiling also does little to help tenants.
In Tuesday’s budget, Finance Minister Ernie Steeves announced a 50 percent reduction in provincial property taxes for “non-owner-occupied residential properties” such as apartment buildings.
The cut would be phased in over just as much over three years, at about 16 percent a year and was paired with a one-year rent increase ceiling of 3.8 percent.
The property tax relief will not affect the municipal property taxes. While these are levied by the province, the tax rates are determined by the individual municipalities.
In October 2021, the province announced its total valuation basis, the assessed value of all properties in the province, increased by 7.7 percent.
This increase was due in part to an increase in real estate sales in the province and could cause an increase in individual property valuations.
Depending on the assessed value of a property and the municipal property tax rate, property owners may end up paying more this year in total property tax, even with the provincial tax.
Willy Scholten, president of the New Brunswick Apartment Owners Association, said Information Tomorrow Fredericton the increase in property tax assessments will erode any potential savings resulting from the tax relief and still leave landlords with a big bill.
10:10Budget – Landlord tax relief
Tenants may be happy to see a cap on a year’s rent, but landlords say a 50 percent property tax reduction for them doesn’t help their case. Willy Scholten is the president of the New Brunswick Apartment Owners Association. 10:10
Scholten said that in combination with the rent ceiling, it could hurt many landlords.
“Landlords will now struggle with their business,” Scholten said.
Tenants criticize tax breaks
But it is not only landlords who are dissatisfied with the province’s tax cuts.
Julia Woodhall-Melnik, Canada Research Chair in Resilient Communities based at the University of New Brunswick Saint John, said she is concerned that the 50 percent cut could attract more external investors to the province to buy housing stock and increase rents.
“So really, what we do by taking the tax out of the market that landlords would have previously paid is that we take away money that could be offered to other social programs,” Woodhall-Melnik said in a speech to Information Tomorrow Saint John.
Scholten said the tax cut has not given rise to any new talk of building more units.
We did a poll of our members and asked them if this has affected their plans to develop, Scholten said.
“They told us that 4,500 units were now on hold.”
Bad rap
Scholten said some of the rent increases are “not acceptable” and admit that some landlords in the province are “not respectful”, but he points to the tenancy court as a solution to these problems.
He said landlords are being painted with the same brush, though most landlords care about their tenants.
Information morning – Saint John17:02New Brunswick’s housing crisis.
Housing advocates in the province say the latest budget will make the housing crisis worse. Host Julia Wright speaks with Julia Woodhall-Melnik, Canadian Research Leader in Resilient Communities and President of the New Brunswick Apartment Owners Association. Willy Scholten. 17:02
“For example, during the two and a half years the pandemic lasted, our business only increased the rent for our renters by 2 percent,” Scholten said.
“But we do not hear those stories.”