Savings on property taxes are coming soon
Published Saturday November 7th, 2009
It will soon be that time of year again when the provincial government provides cities, towns and villages with their tax base information, which they will in turn use to set their tax rates.
But there's something new this year - the property tax accountability mechanism. It not only applies to municipalities, but to provincial property taxes, local service districts and rural communities.
The mechanism was key part of a record tax relief package in our budget last spring. Its goal is to provide a cushion for New Brunswickers from growing property tax bills due to rapidly rising assessments.
Due to increases in property tax assessments over the years, the province and many local governments have been receiving escalating property tax revenues. Despite the extra revenue, property tax rates in general have not been reduced to reflect overall increases in property values.
The mechanism, very simply, sets a tax rate based on the previous year's assessment base, the consumer price index (CPI) and new construction.
The accountability mechanism also allows municipalities and the province to continue to experience growth in annual property tax revenues from new construction and inflation. But the new mechanism means that more than ever before, property owners will have a clearer picture of the tax bases in their community and how much it increased or decreased in the past year.
As an example, if Community "A" had a tax rate of $1.45 per $100 of assessed value last year, depending on CPI and new construction the new mechanism could show that the rate next year should decrease to $1.40.
However, if the council of Community "A" decides it needs the $1.45 rate and the revenue it will generate, a vote will be held publicly and council would explain why the $1.40 rate wasn't used. And I would add that those reasons can be completely understandable and could be related to major infrastructure projects in that community.
That is one thing that the mechanism does not do - it doesn't, in any way, prevent municipal councils around the province from ultimately setting their property tax rates.
Similarly, if government decided that it was unable to adopt the lower base rate for each of the provincial property tax rates, it would have to bring the issue to the floor of the legislature for a vote.
The property tax accountability mechanism does not prevent the market value of your own home from going up. Because of that, we realize that increased property assessments could mean a higher tax bill. This could occur even if the lower base rate is used.
A property assessment is merely a snapshot of the market value of a property at a certain point in time. For most families, our home is our most valuable asset, and we all want to see our assets grow. They've certainly been growing in New Brunswick over the past seven years, and assessments have increased as well to reflect the growth in values.
We believe the property tax accountability mechanism strikes the proper balance, provides clarity and will protect New Brunswickers. We're proud to have brought it forward.
It's a new way of doing things and will help property owners next year and into the future. And just as important as the savings it will produce, is the key word that is in the mechanism itself: accountability.
The Hon. Greg Byrne represents the riding of Fredericton-Lincoln.
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The Liberal government will go down not only as the worst government this province has ever had, but also the most disingenuous.
More deception is tying the gov’t assessment to your property value. They think we’re stupid enough to believe that our property value is tied to “their” assessment and not the market driven forces.
Consider this scare tactic by the Minister “we want to see our assets grow." Well duh, sure we due but what has that to do with his proposal?
Then this “will protect New Brunswickers” He left out “some” because he said previously that “increased assessments could mean a higher tax bill” for some. It’s still the old ‘divide and conquer’.
The accountability factor is a good step but at what cost? A vote very couple of years for starters? The simple solution is to cap the assessment increase for taxation purposes. This would give more fairness to the system by not selecting some to pay a much larger increase than others and could not be said to affect the market value of any home. It would still provide more accountability by making tax rate increases more reflective(transparent) of the reality.
PS-did this in a rush but get my point?
Not if my local council of glory seekers and tax-gobblers along with my local real estate aqents, speculators and snake-oil sellers have their way.
The energy hub "idea" may have died and gone to rot but the greed and envy it inspired has not, not yet anyway.