New Brunswick

Property taxes on homeowners in N.B. cities surge after year of record real estate sales

Robert Caverly moved from McAdam to Moncton last fall and was burned in the city's sizzling housing market.  

Data shows Fredericton residents pay the most, Saint John the least

Red hot real estate sales all over New Brunswick in 2021 drove up property values almost everywhere, causing 2022 assessments and tax bills to rise. (Robert Jones/CBC)

Robert Caverly moved from McAdam to Moncton last fall and was burned in the city's sizzling housing market. 

He ended up paying $235,000 for a house on Fifth Street assessed to be worth barely half of that amount. That was painful enough, but when Caverly's property tax bill arrived this month he was stunned by the $3,186 charge, an $1,100 increase over what the house was billed last year.

"I pay more. I understand that. But there's been absolutely no renovations done on the house," said Caverly. "There's no difference in the house.

"We're basically paying an extra hundred bucks a month just for taxes."

Caverly's experience is extreme, but property taxes are up for tens of thousands of homeowners this year, and  assessment increases driven by rising property values have been doing all the lifting.

Robert Caverly bought his house in Moncton in November for $235,000. It was 90 per cent above its assessed value. That has pushed his tax bill up $1,100. (Submitted/Robert Caverly)

The biggest tax jumps on average have been in Fredericton, where records compiled by the website propertize.ca for CBC News show the median tax bill on owner-occupied single-family houses in the city this year have risen $213, to $3,206.   

Last November, Fredericton council voted to reduce the municipality's tax rate 1.6 per cent, but assessment increases on homes throughout the city averaged eight per cent and higher. That meant higher bills for homeowners this spring, despite the tax rate reduction.

In November,  Ward 12 councillor and finance committee chair Henri Mallet told CBC News that local political leaders were torn on how high the tax-rate cut should be, given how much property assessments were escalating.

"Some people wanted a bit more, some might have wanted a bit less, so we could reinvest in our community, so it was kind of a happy medium for council," Mallet said about the 1.6 per cent reduction. 

Fredericton has the lowest tax rate among New Brunswick's three largest cities, but homeowners pay the highest property tax bills because Fredericton has the highest property assessments.

Donna Reardon would like assessments to be higher so the tax rate can be cut further. (Robert Jones/CBC)

It is the exact opposite in Saint John.

It has the highest tax rate among the three cities but this year, the median property tax bill on owner-occupied single family houses in Saint John is the lowest of the group, at $2,815, according to the propertize.ca data. 

Property tax bills in Saint John also grew the least from last year, thanks to a 4.2 per cent tax-rate cut passed by the city.

Saint John Mayor Donna Reardon is frustrated people don't view Saint John as a low tax jurisdiction because of the city's still high tax rate. Low and slow-growing assessments in Saint John have kept individual tax bills down, but Reardon believes few people focus on that

"It's only the one narrative, and it's that you have a high tax rate," she said.

"The narrative that your assessment is lower isn't on the radar at all. You're never going to hear anyone talking about that." 

Saint John's exclusive Anchorage Estates has sweeping views of the Saint John River, but Service New Brunswick has been reluctant to incorporate high sale prices of homes and lots here fully into its tax assessments. (Google Earth)

Reardon has been critical of Service New Brunswick for several years, accusing it of undervaluing properties in Saint John. That, she said, has restricted efforts to lower the tax rate further.

"You're paying less taxes here, but it's sad," she said. "The only narrative that goes out, unfortunately, to the public is the rate. If the assessments were more equitable, then we could drop the rate." 

Saint John experienced the same run on real estate in 2021 as other New Brunswick cities, but that did not appear to trigger assessment increases in the same way, even in neighbourhoods where properties were attracting record prices.

While most of what Robert Caverly paid for his house in Moncton was immediately reflected in an elevated assessment, in Saint John there were plenty of examples of that not happening.

On Rocky Terrace, the sale of a home and lot that sold for $550,000 in June, 53 per cent over its assessed value, triggered an assessment increase of just 4.5 per cent.   

Caverly paid 90 per cent above his home's assessed value, and his assessment immediately jumped 65 per cent.

In Saint John's Anchorage Estates, a waterfront home that sold for $1 million in June, 53 percent above its assessed value, had its assessment increase 11.6 per cent to $731,300. 

Multiple building lots in the same Anchorage neighbourhood  that sold for $200,000 and above in 2021 — more than double their assessed values — received no increase at all in their 2022 assessments.

This building lot on Anchorage Avenue in Saint John sold for $169,000 in 2021 — 125 per cent above its assessed value. But that triggered no assessment change. (Robert Jones/CBC)

Reardon blames valuations like that for the city not being able to get its tax rate lower. 

"If you're not being assessed fairly and equitably in relation to these other two big cities, then how do you compete?" 

Assessments are up the most in Moncton this year, but a 6.2 per cent tax cut by the city, and provincial rules requiring large assessment increases to be implemented over multiple years, has kept most bills from escalating significantly.

For 2022, the median property tax bill on owner-occupied single-family houses in Moncton is $2,906, a $95 increase from last year and firmly in between the two other cities. The amount is $91 higher than the median property tax bill in Saint John but $300 less than in Fredericton.

Hundreds of Moncton homes had assessment increases above 20 per cent this year, but provincial "anti-spike protection" rules only allow 10 per cent assessment increases per year, unless a property has been renovated or, in Caverly's case, is newly purchased.   

That will spread out tax increases in Moncton over multiple years for most homeowners, a provision Caverly believes should apply to him as well.

"They have rent increase limits of 3.8 per cent this year," Caverly said. "Surely with everything else going up as high as it goes, they can they can do something to help homeowners [like me]." 

ABOUT THE AUTHOR

Robert Jones

Reporter

Robert Jones has been a reporter and producer with CBC New Brunswick since 1990. His investigative reports on petroleum pricing in New Brunswick won several regional and national awards and led to the adoption of price regulation in 2006.

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