Bill 34 introduces more time for property owners to appeal assessments and changes the timing and cycle of the assessment process

Recently passed Bill 34 includes some amendments NL property owners should be aware of.

NL’s property tax system operates under two assessment authorities: one for St. John’s and another for the rest of the province. This could be classified as atypical, however, historically much of the legislation (Assessment Act, 2006) under which they both operated was the same. Bill 34 does cause some variability between the two areas, mostly to do with the assessment cycles, as well as some other unilateral changes that affect NL property owners.

What has Changed?

Bill 34 amends the Assessment Act, 2006 to:

  1. Change the cycle & timing of the assessment process;

The Municipal Assessment Agency, or “MAA” will change to a one-year cycle (from three) for the assessments of properties outside of St. John’s.

The City of St. John’s on the other hand will go to a two-year cycle (from three) from assessments within “the City”. Completion of roll deadline (release of tax notices) is shorted from September 30 to August 30. Assessment authorities can still apply to the minister for an extension, which is not uncommon.

  1. Extend the period during which taxpayers may appeal their assessments;

The 30-day deadline will be extended to 60 days. Property owners can still appeal annually or following receipt of any supplemental notices (generally for new construction and renovation).

  1. Remove all references to special purpose properties or reproduction cost valuation from the Act as properties are no longer classified as special purpose properties.

This cleans up some old verbiage tied to properties previously classified as “special purpose” that is no longer relevant.

Strides in the Right Direction

Many of the changes are positive. First, I’m sure we can all appreciate the benefits of shortened cycles with more timely assessments. For instance, a shortened cycle can help facilitate more accurate assessments and can also alleviate some variability (or spikes) between cycles, at least on the assessment side of the tax bill equation.

Another positive impact is the “base date”, being—as the name would suggest—the date at which the assessment is based. With the old three-year cycle there was a four-year gap between the base date and assessment year by the time year three of the cycle was reached. For example, a 2018 assessment was based on the perceived value as of 2014. Some may ask, “who cares?” Well, this gap was particularly frustrating during the last cycle when assessors were bound by a base date of properties prior to the economic downturn. With the new changes, base dates will fall nearer to the assessment years.

An additional notable change is the extension of appeal deadline from 30 to 60 days. Across Canada appeal deadlines vary, but generally 30 days is on the low end of the range. This extended period benefits property owners for an obvious reason: owners have more time to file. It’s worth noting we are a couple years out from Bill 34 taking effect, but St. John’s did extend their appeal deadline this year. Notices were released in late November and—due to the appeal deadline occurring during the holiday season—an extension was granted until January 31.

One last noteworthy change is the special purpose references in the Assessment Act, 2006. The special purpose reference was no longer pertinent, so the bill helped clear up some old verbiage.

What We Wish Could be Improved:

The varied cycles
The two-year cycle in St. John’s versus the one-year outside St. John’s creates a mixed bag of pertinent dates. We can certainly appreciate the current undertaking of the assessment authorities, however, it is unfortunate that uniformity in this regard couldn’t have been maintained. Property owners commonly own properties throughout the province and could be a cause of confusion.

We are informed that St. John’s will wait out the current three-year cycle before implementing the change, so they start their first two-year cycle for the 2022 assessment year. MAA, on the other hand, is implementing their one-year cycle sooner, for the 2021 tax year. This only gets further convoluted with varied base dates of assessment come year two of St. John’s assessment cycle.

Confusing? Definitely, and in our view commonality in assessment cycles would have mitigated much of this.

Business (or tenant) assessments are still imposed (outside St. John’s)
Throughout Canada property owners are accustomed to receiving a property tax notice. Although this is not always a welcome receipt, it is a fact of life. Parts of NL take this a step further and send multiple assessment notices for the same commercial property: one to the owner and separate ones to all the tenants. If you happen to be an owner-occupier of a commercial property, you get two notices. Fortunately, the City of St. John’s has recently done away with business assessments and instead offers rebates when tenants leave. Our hope is—one day—the remainder of the province will follow suit.

What Should Property Owners Do?

Evidently, navigating the complexities of the assessment legislation in NL is no easy task. For further property tax advice, reach out to one of our local Altus Group Experts in Atlantic Canada.