The New Brunswick government is accelerating a plan to reduce the so-called “double tax” on non-owner-occupied properties in the province one year ahead of schedule.
It was announced on Tuesday in a slew of tax cuts.
“This acceleration will help address the rising cost of living for New Brunswickers by offsetting assessment increases and addressing the tax burden,” Finance Minister Ernie Steeve said in a release on Tuesday.
However, the New Brunswick Apartment Owners Association said it is only a piece of the puzzle needed to address the issues in the housing stock.
“We appreciate what the government has done as far as speeding up the portion of the decrease,” said Willy Scholten, president of the NBAOA. “Of course, this doesn’t fully eliminate the double taxation because they’ll still be left with 50 per cent at the end. We’ve also had, as of now, two years of these extreme assessment increases.”
Scholten said the property assessments continue to rise and that does factor into how much landlords charge tenants, saying it’s one of the biggest expenses they contend with.
The government did introduce spike protection for landlords.
The relief was put in place for the 2022 and 2023 property taxation years, and is available on non-residential properties and apartment buildings with four units or more, with annual assessment increases greater than 10 per cent.
Without the spike protection, property assessments could rise 40 per cent.
“So, if we’re facing a 40 per cent possible increase in taxes next year because it hasn’t been dealt with yet, then obviously that is something we have to take a strong look at in determining our rental rates,” he said.
Scholten also needs to be extended for at least another three years in order to help lift the province out of the housing stock shortage.
The vacancy rate, Scholten said, is around 1.7 per cent and he believes it is likely to be lower than that when the Canada Mortgage and Housing Corporation releases its next report on housing in New Brunswick.
Meanwhile, the NB Coalition for Tenants Rights said the tax relief for landlords won’t help the current affordable housing crisis or the situations renters are grappling with.
Matthew Hayes, with the coalition, said the government is looking to the private sector to solve a problem that needs to be addressed in a public way.
“The initiative announced yesterday, under the umbrella of helping tenants, is frankly an insult,” he said. “What it actually does is transfer public funds that are needed to resolve the housing crisis to the largest landlords in the province, who are going to benefit the most. But to blanket cut taxes on landlords, this is not a good public policy, it’s just bad public policy and it’s not informed by evidence.”
The government said it’s estimated 44,000 residential rental properties and more than 24,000 non-residential properties will benefit from the changes.