An independent study prepared for the Union of Nova Scotia Municipalities is recommending the province phase out the cap on residential property assessments introduced nine years ago.
The report was released Thursday and says the cap has disproportionately benefited the owners of more valuable homes. It’s also created situations where properties in the same neighbourhood with almost identical market values are paying quite different taxes.
Lifting the cap is up to the provincial government. Municipal Affairs Minister Mark Furey says he is "open" to the idea, but hasn't made up his mind.
The report was prepared by two property tax experts: Enid Slack with the University of Toronto and Harry Kitchen at Trent University.
The cap was brought in when the market values of many homes in the province were spiking. About 70 per cent of homeowners in the province have their property assessment capped at inflation.
But the cap is lifted when a property is sold, sometimes leading to a jump in assessed value. The cap also does not apply to new homes.
"It’s turning out to be just a totally unfair system, there’s no question about it," says Kentville Mayor David Corkum, president of the UNSM.
He says the cap also discourages people from selling their old home and buying a new one.
And the report finds that homes with higher market values are seeing greater savings than homes that are less valuable.
If the cap is lifted, Corkum says a system would be put in place preventing municipalities from using it as windfall.
He says tax rates would be brought down as assessments rise.
"This is not about municipalities looking for more tax dollars," Corkum says. "This is always about fairness to who should be paying more and who should be paying less."