New Brunswick property tax causing investor exodus
The municipal and provincial residential non-owner occupied property tax in New Brunswick has been on the minds of stakeholders for decades.
This tax in New Brunswick has caused buyers and investors to seek vacation and income properties in other provinces.
As the demand for rental housing nationally outpaces ownership, the New Brunswick Real Estate Association is advocating for a change in legislation since New Brunswick is the only province in Canada with non-owner occupied tax.
“We’ve been lobbying basically since 2010 to create a fair taxation system. One of the things that we are lobbying for mostly this year is the elimination of the double taxation,” said Kari McBride, the chair of the association’s government relations committee.
According to Statistics Canada, between 1994 and 2018 in Nova Scotia, investments in apartments have been increasing. But the same can’t be said in New Brunswick, where statistics show there is no growth in new apartment investing.
“It is stopping investors from coming here, it is stopping people coming in and purchasing income properties, and it is also hurting our economy, ” said Pamela Doak of the Fredericton Real Estate Board.
In a statement the province said it is aware of the concerns voiced by stakeholders in respect to double taxation.
“As our fiscal situation improves, government is committed to gradually eliminating the double taxation, with an initial focus on helping tenants whose apartment is their primary dwelling,” the statement reads.
At a time when the province is in dire need of low-income housing, Doak says it’s tough to offer affordable units. She has owned a four-unit rental property for almost 30 years and she is now losing money because of the property taxes.
“Unfortunately they struggle every day like many New Brunswickers in our province, and I pay non-owner occupied tax on that property, and I have not increased my rent on that property for a number of years because these folks would not be able to afford to pay the rent,” said Doak.
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According to the Canadian Real Estate Association, the average price for a single family home in New Brunswick in 2018 was $177,200 and the national average was $488,600.
However it costs more to keep a home in New Brunswick. According to Zoocasa, a real estate brokerage, Saint John has the highest residential property tax rate in Canada at 1.785%.
All eyes will be on the legislature in the coming weeks when the government releases its budget. The New Brunswick Real Estate Association hopes there will be a line in it dealing with double taxation.