Finance

$12 million in savings for property owners (10/03/03)

NB 319

March 5, 2010

FREDERICTON (CNB) - The province's property tax accountability mechanism will result in lower property tax rates for New Brunswickers. Finance Minister Greg Byrne said the lower rates have resulted in more than $12 million in savings for property owners this year.

Byrne said he is disappointed that only five of 101 municipalities have adopted the rates under the new mechanism. However he said that he is encouraged that an additional 20 set their 2010 tax rates lower than their 2009 rates and 41 other municipalities kept their 2010 rates unchanged from 2009.

He said he is satisfied that the policy is meeting the Province of New Brunswick's goals of providing greater accountability and transparency in property tax rates.

"As a government, we have stepped up to provide relief to property owners and business in this province," Byrne said. "While we certainly understand that some communities have financial challenges and could not bring their rates down this year, we believe the accountability mechanism will address the issue of escalating property taxes over time and ensure that governments making decisions on public expenditures are more accountable to the taxpayers who pay for these services."

The mechanism was part of the Plan for Lower Taxes in New Brunswick 2009-2012 introduced in the 2009-10 provincial budget last March.

The rates are determined by a formula that uses the tax base of communities from the previous year plus new construction and a market value increase of up to the rate of inflation, using the consumer price index (CPI).

The mechanism is the provincial government's response to a situation that has become more common over the years, whereby property taxes have increased significantly faster than inflation.

Considerable growth in property values across the province has led to property assessment increases, but tax rates generally have not dropped to offset the increase in property values.

"The introduction of the accountability mechanism has generated a great deal of debate at the municipal level, and we have heard calls for property assessments to be capped," Byrne said. "However, jurisdictions that have tried this have often experienced negative effects because of the way these caps impact the housing market. Ultimately, most homeowners want the value of their properties to rise - not to remain stagnant."

Byrne noted that the provincial government does not set rates in municipalities.

"We have brought historic personal and corporate income tax relief to New Brunswick, and we believe that the accountability mechanism and the other measures we have put in place as part of our plan for lower taxes will protect New Brunswickers," said Byrne, adding that the provincial government maintained the unconditional grants to municipalities at the same level the past two years despite economic pressure to reduce them.

"We are all in this together, and communities and the Province of New Brunswick must work together to help protect home and business owners from ever-increasing tax bills," Byrne said.

10/03/05

MEDIA CONTACT: Marc Belliveau, communications, Department of Finance, 506-453-4138.

10/03/05