The city of St. John's has lowered its main tax rates for the coming year, but property owners will still face steeper bills.

During a lengthy meeting that was marred by occasionally nasty exchanges, council voted Monday evening to lower residential property taxes by about 10 per cent.

Deputy Mayor Dennis O'Keefe said council should give property owners a deeper cut in their taxes.
(CBC)

However, the average property assessment this year — the first review in three years — jumped about 22 per cent, meaning most homeowners will be paying more for city services.

"It's Christmas. Let's give it back to the taxpayers," said Deputy Mayor Dennis O'Keefe, one of three councillors who argued for a steeper rate decrease.

Eight councillors voted for a residential rate cut of 1.2 mills, bringing the tax to 11 mills.

The mill rate is the tax paid per dollar of assessed value of property, with one mill equal to $1 per $1,000 of assessed value.

Coun. Gerry Colbert said the new tax schedule should leave the city with an extra $500,000.

"I'd like to see [that put] back into capital programming, for such things as sidewalks and street improvements and potholes and curbs and gutters," Colbert told the meeting.

"Citizens have spoken to me and called me and said, 'Look, I don't mind paying a extra few dollars if you fix up the streets,' " Coun. Art Puddister told the meeting.

Coun. Keith Coombs, who sided with O'Keefe and Mayor Andy Wells, said a drop of 1.4 mills was justified.

"I believe a city is more than streets, and sidewalks, moving snow and picking up garbage," Coombs said.

Commercial tax rates, which vary depending on the type of business, were lowered by 1 mill.

Property assessments are conducted every three years. Assessments released earlier this year were the first to account for a housing boom that most real estate observers say has passed its peak.