The New Brunswick Apartment Owners Association (NBAOA) is reporting skyrocketing increases in property assessments. NBAOA represents an estimated 70% of rental properties in the province and indicates that the increases could result in over $50 million in additional property taxes each year. According to the association’s president, Willie Scholten, the increases are averaging about 42%, with landlords individually informing him of anywhere between 20% to 120% increases.
The NBAOA is calling on the Higgs government to reduce provincial tax rates so that landlords and tenants pay the same taxes as before the increases were made. Scholten indicates that with the rates as they are, many tenants can expect rents to increase by over $100.
There are however already growing reports of steep rent increase notices being sent out to renters. On December 16, 2021, a Saint John couple on pension received notice that the rent on their 2-bedroom apartment was set to increase by 61%, from $620 to $1000. This notice arrived just 2 days before new tenant protections that require landlords to give at 6-months’ notice before increasing rent went into effect.
The NBAOA is also reiterating demands for an end to what it terms as ‘double tax’. New Brunswick landlords are subject to both provincial and municipal property taxes. However, not everyone believes that this is an issue of concern.
This is due to New Brunswick property assessments being historically lower than most other jurisdictions, resulting in a final tax bill that is comparable to other regions with lower property tax rates. The association has also been accused of false equivalency by comparing New Brunswick tax rates with those of larger urban centres with low tax rates by much higher property values like Toronto.
Leader of Official Opposition (NB), Roger Melanson, is calling on the Higgs government to address the issue, particularly by introducing a cap on assessment increases. Melanson affirms that there is a temporary infusion of outside investment in such properties that is causing a temporary increase in their values. University of New Brunswick’s Associate Professor Julia Woodhall-Melnick has also pointed to heightened investment from real estate investment trusts (REIT) as a contributing factor towards increasing rents.
The Higgs government had promised to address perceived double taxation during the 2018 election campaign period. Provincial property taxes were to begin being reduced in March 2020, but the plan was cancelled in May 2020 due to pandemic concerns. Local government minister Daniel Allain did however announce in late 2021 that municipal property tax reforms would be starting from 2024.
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