Select Page

Is the gift of time a blessing or a curse for property owners?

Property taxation in New Brunswick has certainly been ripe with controversy in recent years. However one constant, other than the high property tax rates, is that of change. As we wrap up the 2019 year, it is evident next year will be no different as we are on the cusp of some significant changes, and separation, between assessment and taxation in the province. This is a significant departure from past practices and may come as a surprise to many.

Who?

This impacts all property owners for all property types. 

What?

Tax assessments and tax bills will no longer be issued together. Instead, there will be a significant lag between the two. As a consequence, by the time a taxpayer finds out what they owe, the appeal period will have already expired. To elaborate on the particulars;

  • Nothing will change for the 2020 assessment year. The tax notice and tax bill will be released together in March of 2020 with a 30 day appeal window.  The base date is January 1, 2020.
  • For the 2021 assessment year, an assessment notice will be released in October 2020 – again with a 30 day appeal window. This notice will not specify the tax burden and will be released ahead of the base date of assessment, being January 1, 2021. The tax bill (showing taxes owed) then gets released separately in March of 2021 but cannot be appealed.

It is noted that assessors will also have the autonomy to hold as well as to re-issue particular notices, which is foreseeable under a number of scenarios, given issuance of tax notices prior to the base date.    

When?

The changes will take effect for the 2021 assessment year which means New Brunswickers will have two (30 day) appeal periods in NB next year, albeit for separate assessment years;

  • Appeal deadline for 2020 assessments will be in late March of 2020, as per previous practice
  • Appeal deadline for 2021 assessments will be in late October (or early November) of 2020

So for 2021 taxpayers will find out their 2021 taxes due in March of 2021, but they can no longer appeal at that time.

Where?

This is provincial and affects all assessable real property across NB.

Why?

The assessment authority, Service New Brunswick (SNB), has been looking to separate the Assessment Notice and the Tax Notice for some time now. A common complaint of assessment officials is that appeals are filed due to tax rates (which they do not control) and not the assessed value (which they do). This can also largely be attributed as a reaction to a 2017 Auditor General report. This report summarized a special examination that was triggered from a media storm surrounding some allegedly mishandled residential assessments and included a number of findings and recommendations. One of the Auditor General’s recommendations, in part, was to separate tax notices and tax bills. The specific recommendation was as follows[i];

 “2.145 We recommend Service New Brunswick (Property Assessment Services) issue annual property assessment notices separate from property tax bills that lists the real and true value of the property and explains clearly why the assessed value has changed from one year to the next.”

How?

Bill 19, with the tantalizing title, “An Act Respecting the Assessment Act, the Real Property Tax Act and the Real Property Transfer Tax Act” propagates the change across the various acts and regulations (don’t worry, we’ve reviewed these changes so you don’t have to).  Ultimately, the changes to the assessment and taxation processes are dramatic and we expect this will be confusing and frustrating to many. Since the property tax scandal in NB there has been a seemingly never-ending news cycle focused on property assessment and taxation in the province. We expect that this will again garner some attention, particularly when an owner misses their opportunity to appeal. Evidently, communication is paramount and we are informed SNB will communicate through various means and channels.

Huh?

Some may question the reasoning here, as frankly it appears the benefit is to the assessment authority in reducing appeals, but in fairness the Auditor General’s 2017 report does provide some insight where it states[ii];

“2.144 Unlike many other jurisdictions in Canada and the USA, taxpayers in New Brunswick are presented one assessment and tax notice. This notice shows the value for tax purposes, which may incorporate certain deductions. This complicates the issue of transparency because it increases the likelihood that two similar properties will show significantly different values. Presenting a real and true value on an assessment notice separate from the tax bill would improve transparency in this area.”

It is worth noting the Auditor General’s recommendation does not specify timing between issuance of the notice and tax bill. The lag we are now faced with is pertinent as ultimately tax rates can be of significant detriment to market value, particularly in income producing properties. For this reason, taxpayers should commonly consider the rates, at least in part, in formalizing an opinion of whether or not to appeal. Of course if an owner were aware of a shift in taxes as applicable, clearly this could impact the decision to appeal or not. It is also foreseeable that most taxpayers would not be well versed in the particulars of NB’s already complicated property taxation system. Ultimately the impact of tax rates on market value of real property is a topic in itself but a concern is taxpayers only learn of the impact of the assessment on their tax burden, and bottom line, well after the appeal window has expired.

In NB the amount owing for property tax is largely based off tax rates implemented by the Province and the Municipalities (or Local Service Districts). To expand on timing, with a new appeal deadline (of say late October) municipal budgets are commonly not finalized. For this reason, absent of a sophisticated forecasting exercise, an owner will not have a good sense as to the implication an assessment has on their taxes. Furthermore, even if budgets are finalized at time of release of the notice, it is onerous (and unlikely) for most owners to investigate the specific impact of an assessment on their future taxes. It would appear “transparency” is a key concern here of the Auditor General and our view is the gap in timing between the issuance of the tax notice and tax bill can more aptly be qualified as “opaque.”

For these reasons we anticipate that these changes will cause confusion and frustration to some in the coming years. We do encourage property owners to reach out with any questions come release of tax notices in NB. Although we are happy to field calls come release of the tax bills as well, we caution that at that time, if an appeal is warranted, it will be too late. 

[i] http://www.agnb-vgnb.ca/content/dam/agnb-vgnb/pdf/Reports-Rapports/2017V3/Chap2e.pdf

[ii] http://www.agnb-vgnb.ca/content/dam/agnb-vgnb/pdf/Reports-Rapports/2017V3/Chap2e.pdf

close
close
forumContact us
close
close

Thank you for contacting us. we will get back to you shortly!

This site uses cookies to improve your user experience. By using our website, you are agreeing to our use of cookies.
Click here for more information.