A
representative for New Brunswick apartment owners says renters in New
Brunswick can expect big increases next year if landlords see an
expected lapse in protections limiting how much their property taxes can
go up annually. (David Horemans/CBC)
A
spokesperson for New Brunswick landlords is warning that a gap in
protection against enormous property tax increases will result in
significant rent hikes for tenants next year.
However,
critics are questioning that warning, considering many tenants have seen
hefty rent hikes even while landlords have been protected against big
increases in property taxes in recent years.
"It's using
the taxation as an excuse [to raise rents]," said Peter Jongeneelen,
co-chair of ACORN New Brunswick, a tenants' rights group.
"No matter what, with no rent control in the province, we're still going to see rents go up."
New
Brunswick Apartment Owners Association president Willy Scholten says
landlords in the province are anticipating big increases to their
property tax bills next year. (Shane Fowler/CBC)
Willy
Scholten, president of the New Brunswick Apartment Owners Association,
says landlords are bracing for a large jump in the property taxes on
their buildings in 2025 and will be left with little choice but to pass
that on to tenants.
Since 2022, apartment owners have
been covered by a provincial policy capping the annual increase in
assessed property value for which taxes had to be paid, said Scholten,
who also serves as the chief financial officer for Colpitts
Developments.
That meant, for example, if the assessed
value of a property went up by 30 per cent in 2022, the owner's tax bill
was only based on the assessed value going up by 10 per cent.
Scholten said the 10 per cent spike-protection policy was continued for 2023 and 2024.
WATCH | 'That is the last thing we want':
Could big rent hikes be in store for tenants next year?
Duration 2:39
A
spokesperson for New Brunswick landlords says they’re bracing for a gap
in protections limiting one-time increases to their property taxes —
and they will have no choice but to pass on those extra costs to
renters.
In the last four years, the assessed value of apartments in New Brunswick went up by 64 per cent on average, he said.
Scholten
said starting next year, the same spike protection will be reflected
through new legislation, but not before the total outstanding assessed
increases get lumped into apartment owners' 2025 bills — in addition to
any potential increases for that year, up to 10 per cent.
"It's going to have a significant impact on the rents that we have to charge," Scholten said.
As
an example, a Colpitts apartment building at 34 Abbott Ct. in
Fredericton grew in assessed value by about 64 per cent, from $5 million
in 2021 to $8.2 million this year.
While Colpitts would
have owed $160,909 in property taxes for this year, it actually only
had to pay $130,619, thanks to the spike protection.
Peter
Jongeneelen, co-chair of ACORN New Brunswick, says some tenants have
seen big increases in rent as landlords have enjoyed protections
limiting how much their property taxes can be raised each year. (Submitted by Peter Jongeneelen)
With
a pause in spike protection expected for next year, Scholten said that
property's tax bill will rise by at least 23 per cent, considering its
assessed value doesn't decrease.
"Taxes for our business
represent 35 to 40 per cent of our operating costs, so with
[assessments] going up 44 to 54 per cent in two years, it's obviously
going to mean a major impact on tenants' rents."
CBC
News asked for interviews with Social Development Minister Jill Green,
as well as Service New Brunswick Minister Mary Wilson, but neither were
made available for interviews about the spike protection for landlords.
In
an email, Service New Brunswick spokesperson Jennifer Vienneau didn't
deny that a gap in spike protection for landlords would be happening in
2025.
She said the provincial government has met with
members of the New Brunswick Apartment Owners Association about the
issue, and Service New Brunswick and the Department of Finance and
Treasury Board are reviewing the details of their questions.
"As agreed during the last meeting, we will respond to association members once we have completed our analysis," Vienneau said.
Rents increased amid spike protection
While
the provincial government protected landlords against big jumps in
their property taxes in recent years, Jongeneelen is questioning whether
that benefit got passed down to tenants.
"In the last
four years we've seen places, even in my neighborhood that I know of,
rent increases being like you know 45, 50 and 60 per cent," said
Jongeneelen, speaking from his home in Moncton.
"You know, if there was tax breaks that were given in the previous years, why did the rent go up that much?"
Temporary rent cap
In
addition to protecting apartment building owners from large increases
in assessed property values starting in 2022, the provincial government
also cut the provincial property tax rate going forward from that year.
That resulted in lower tax bills being issued in 2023 and 2024, compared to 2022, for some properties.
The
province meanwhile implemented a one-year rent cap in 2022, preventing
landlords from raising rents by more than 3.8 per cent.
However,
that ended in 2023, and other measures implemented in its place have
been criticized as ineffective by tenant advocates.
Last
October, Statistics Canada reported the average cost of rent in New
Brunswick was nine per cent higher than it was a year earlier. That
increase put average rent in the province at 28.7 per cent higher than
what it was in 2020.
In response to questions about why
rents have gone up, Scholten said property taxes aren't the only bills
that landlords have to take into account.
"We've had
insurance go up over those last four years 50 to 60 per cent. Building
materials have gone up, in some cases over 100 per cent," Scholten said.
"The housing industry is getting hit with extreme inflation increases."
MLAs argue for reprieve for both sides
The
spike protection landlords have enjoyed should continue uninterrupted
next year, said Tracadie-Sheila MLA Keith Chiasson, Liberal critic for
Service New Brunswick.
However, if limits on property
taxes are going to be imposed for landlords, there should be something
similar in place for tenants, he said.
"We need that
spike protection for property owners, and at the same time, just to make
sure that, you know, some aren't taking advantage of the hot market, I
think we do need a rent cap just to kind of protect those renters,"
Chiasson said.
Memramcook–Tantramar MLA and Green Party
housing critic Megan Mitton said she also thinks property owners should
see the spike protection continue uninterrupted next year.
Green Party MLA and housing critic Megan Mitton says there needs to be 'spike protection for tenants as well.' (Ed Hunter/CBC)
But
she said it's interesting the province has chosen to protect landlords
against big tax increases, but won't afford similar protection to
tenants.
"There's a willingness to protect homeowners and apartment building owners ... but not to protect tenants," Mitton said.
"There needs to be kind of a spike protection for tenants as well."
Further push to remove provincial tax
Scholten
said what he wants to see the province do to address his concerns is to
remove the provincial portion of property taxes that must be paid on
non-owner-occupied apartment buildings.
That tax rate is set at 0.5617 and gets tacked on top of the tax rate applied by municipalities.
Finance
Minister Ernie Steeves, in early 2020, said his government would
eliminate that tax, but backtracked after the pandemic began.
New
Brunswick Finance Minister Ernie Steeves announced in 2022 his
government was cutting the provincial property tax rate in half. (Jacques Poitras/CBC)
In
2022, Steeves announced his government was partly moving forward again
with that plan, announcing it would cut the provincial property tax rate
by half.
Scholten said he wants to see the tax removed
entirely, adding that any discussions around imposing a rent cap until
then are unrealistic.
"To have a rent cap that is
capping revenues when there is no control over expenses, and a historic
increase in taxes where we're at right now, that just doesn't, that
doesn't make sense," he said.
Steeves wasn't made
available for an interview about whether his government plans to further
cut the provincial tax rate for non-owner-occupied buildings.
A two percent increase is significant for those who can't afford it now.
David Amos
Reply to Bernie LeBlanc
C'est Vrai
valmond landry
a lot of companyes from out west come here and
pay double the prise for apartment complex then they cry hard time, got
to raise the rent,check on assesment NB and youl know what i mean .
David Amos
Reply to valmond landry
Yup
Dennis Atchison
It would be interesting to fine tune the
discussion a bit, for clarity. Example, how many landlord properties are
debt free, meaning the building is paid for as it has been passed down
through generations (there are many of such buildings in downtown
Fredericton for example). The argument by Landlords is they are near
broke, unable to keep up with change, and any increase will put them -
and tenants - out of business. But I wonder if that is the reality. With
no mortgage, and with massive increase in revenue through rent hikes
(and yes, they say there are "controls" but there are many examples of
landlords raising rents way past the "allowed" percentage ... and they
know they will not get caught). Somehow, something seems way off here
...
David Amos
Reply to Dennis Atchison
In more ways than one
Albalita Rose
Canadian dollar down to 72cents...nice budget Freeland...
David Amos
Reply to Albalita Rose
Surely you jest
Raymond Leger
Too bad we don't have a Provincial government that stands up for New Brunswickers.
Lou Bell
Reply to Raymond Leger
WE do now . The Liberals were only interested in standing up for 1/3 of them .
Jos Allaire
Reply to Lou Bell
Who could them 1/3 be ❓
Mathieu Laperriere
Reply to Jos Allaire
Francophones.
David Amos
Reply to Jos Allaire
You have been told
John Montgomery
Now let's wait for Higgs to complain more about tent cities.
Lou Bell
Reply to John Montgomery
The Fed budget has in it a plan to help
provinces rid themselves of tent cities . Funny theLiberals haven't
announced how they'll accomplish getting those out who state they aren't
receptive to it . All hype and no action as usual by the liberals .
David Amos
Reply to John Montgomery
He is just following Mr Outhouse's directions
Deborah Reddon
This government has done little to encourage
new industrial efforts. Hence they rely on the age old method of taxing
property owners. They also use old and outdated methods of applying
property taxes. If you try to rent out your basement to ease the
housing crisis, Higgs and Steves are there with their hands out. You
get to pay 50% more property tax right off the bat. It's archaic
financial planning.
Lou Bell
Reply to Deborah Reddon
Really ? These aren't " industrial " efforts !
The fed Liberals though , have completely stifled any development of out
Natural resources with their archaic laws they put in place ,
preferring the Atlantic Provinces cater to the whims of Quebec . NO
pipelines , no mines , just overpay for Quebec power . NB is recognized
as a highly resource rich province whose resource development has been
completely arrested by the liberals , both provincially and federally .
Les Cooper
Reply to Deborah Reddon
Nb has indeed tried to get industry here. Nbers keep boycotting them and to much red tape involved from Federal Government.
David Amos
Reply to Les Cooper
Yea right
Errol Willis
I would not want to be a renter in this environment.
Roughly 2-3 times a normal mortgage payment, for what I expect, is not
the greatest living space. And you get nothing in return if you leave.
It seems that regular people just cannot win anymore.
Inflation is well down from 2020 level, but prices have just continued
to climb. Governments keep shelling out money they don't have in obvious
vote buying schemes. Yet the restaurants are always full, planes are at
capacity, and the streets are full of cars all the time. People must be
living on credit.
Robert Fish
Reply to Errol Willis
The government and all politicians and bank
rely on people being fools with their money. It sets the trend. They
hope you go into debt...they need you to go into debt. The let the
middle class drop off the page but who really drops is those that bought
a mort they cant afford when the rates change...and for those that have
paid off their mortgage they will raise property tax to supplement the
loss. Either way...you are getting ripped to shreds...unless you own a
pretend company for tax breaks and dont be a sucker like the rest of us.
Deborah Reddon
Reply to Errol Willis
I think your statement "governments keep
shelling out money" is incorrect. The Higgs government has done nothing
to help lower income families, NOTHING. They have chosen to focus on
paying down the debt while families go hungry and living spaces shrink
and costs for food keep going up.. In fact Higgs and Steves has chosen
to raise house taxes 10-13% which means those costs have to be passed on
to those who can't afford a home. Shame Shame on Higgs and his
disastrous financial plan to burden lower income families.
Gail Steeves
Reply to Deborah Reddon
It's like tossing everything you earn into your mortgage while your children go without food or clothing.
Errol Willis
Reply to Deborah Reddon
I don't necessarily disagree with you actually.
I will say that there is a balance that has to be reached. I've always
thought of it the same way I manage my household income - I don't hoard
money and go without food just to say I can have money in the bank, and I
also don't go out and buy items that I have no plan on how to plan for
them. Higgs and Trudeau seem to be playing the same game with one
hoarding and one spending without consideration of paying for it.
Lou Bell
Reply to Deborah Reddon
They don't choose to raise " house taxes " by
10 to 13 % . The market and consumers decide how much one pays in taxes .
It's a shame there's so many who don't understand finance and fiscal
management . The province assesses properties based on the market . The
Municipalities are who decides the rate we all pay . You need to
understand how you're taxed and by whom With higher assessments , all
the Municipality needs to do is lower the rate , and they'd still be
collecting the same as they did last year. Really , not that hard to
understand !
David Amos
Reply to Robert Fish
Amen
Robert Fish
Since October 2020, cumulative rent increases
in New Brunswick have averaged 28.7 per cent, the highest of any
province in Canada. Just try it...Higgs
David Amos
Reply to Robert Fish
He will
Robert Fish
Then tenants will be expecting and reporting
non stop. Better have it together rent raisers. It is already past the
2k a month for shoddy buildings. Expect to be reported on all shady
practices and exposed publicly. Its time.
Deborah Reddon
Reply to Robert Fish
I think you meant to identify the 'rent risers'
as Higgs and Steves. By continually raising property taxes that must
be passed on to renters they have caused rents to increase. This means
the cost of increased property taxes gets passed on to those who can
least afford it. Shame Shame Higgs. Time for you to go!
David Amos
Reply to Robert Fish
Its way past high time
Round ONE
205 Comments
David Amos
"Service New Brunswick spokesperson Jennifer Vienneau
didn't deny that a gap in spike protection for landlords would be
happening in 2025."
Go Figure
Dennis Woodman
There are some greedy landlords, but many
others are just trying to pass on huge cost increases. Taxes, garbage
collection, snow removal, insurance and renovation/upkeep costs all are
up substantially. Then if their mortgage is coming due this year, are
they just supposed to eat the increase ?
Inger Nielsen
Reply to Dennis Woodman
if they could not afford to become a landlord
then they should not have became one its not up to tenants to bail
landlords out of poor investments they made by buying up income
property's triple the market value. that put up a false market value on
the property to begin with then put the cost on tenants. in turn are
part of the reason homelessness is becoming such a huge problem for
people who are only able to rent. it is going to backfire on them
eventually
David Amos
Reply to Dennis Woodman
Good point
Rich Hatfield
Landlords had better make sure that every scrap of ice is removed from walkways this winter.
I can see their insurance going up next year.
When I slip and fall, call my lawyer first, then the ambulance.
Danny Sterns
Reply to Rich Hatfield
So you are advocating insurance fraud?
Rich Hatfield
Reply to Danny Sterns
Nothing fraudulent about a preventable accident. Fault would lie with the landlord.
David Amos
Content Deactivated
Reply to Rich Hatfield
Say Hey to your lawyer for me will ya?
SW Home
Reply to Danny Sterns
It isn't fraud if it happens
Danny Sterns
Reply to SW Home
Did you read his post?
SW Home Reply to Danny Sterns
Yea I did, or I wouldn't have commented. For
the record though please enlighten the masses on what part do you think
it's fraudulent when/if a landlord gets sued for not properly having
snow and ice removed and it resulted in a slip and fall? This should be
good for a laugh...
David Wilson
One can not have enough Porsche's
Danny Sterns
Reply to David Wilson
I prefer Mercedes AMG, have had two so far, but tastes run differently.
David Wilson Reply to Danny Sterns
Tough to get parts these days.
Danny Sterns
Reply to David Wilson
Currently have an Audi GT etron RS.
Danny Sterns
Reply to David Wilson
Not really, they over night from the factory.
David Wilson Reply to Danny Sterns
I have read that car is a Lemon.
David Wilson Reply to Danny Sterns
I know people who have been waiting over a year for parts.
Danny Sterns
Reply to David Wilson
Read? Drive one or own one?
Danny Sterns
Reply to David Wilson
You have friends?
David Amos
Reply to Danny Sterns
Do you?
Camdon Buckley
Maybe Willy should pick himself up by his
bootstraps and get a real job if he cant "afford" the inflation (read:
profit margins less than what he wants)
Le Wier
Reply to Camdon Buckley
It seems nowadays that no business big or small want any costs to running a business. They want all the profits.
Camdon Buckley
Reply to Le Wier
Oh theyd charge 5000/mo to rent uptown if they could get away with it.
Danny Sterns
Reply to Le Wier
“They want all the profits.”
Well ya, that kind of is the point.
Le Wier
Reply to Danny Sterns
But it doesn’t work that way there are costs to running a business.
Danny Sterns
Reply to Le Wier
Really? Thanks Captain Obvious.
Le Wier
Reply to Danny Sterns
I didn’t mean it to sound like that. I just was
thinking of big business like Loblaws complaining about how much it
costs them to bring in goods through the supply chain, and smaller
businesses that charge a fee for each shop towel they use. Everyone
understands that businesses need to turn a profit, but gouging customers
is not the answer.
David Amos
Reply to Le Wier
C'est Vrai
Le Wier
Reply to David Amos
Have you read or listened to Mary Trump’s book?
This story reminds me of what she said about the way her grandfather
built the family real estate empire.
David Amos
Reply to Le Wier
I stress tested her and her lawyer's integrity years ago and they failed bigtime
David Amos
Reply to Le Wier
More importantly have you not noticed a glitch in the system?
Le Wier
Reply to David Amos
I listened to her book, and it was interesting
in some places. This story just reminded me of all the shenanigans her
grandfather would do to tenants 70 years ago. Which system?
New
Brunswick Apartment Owners Association president Willy Scholten says
landlords in the province are anticipating big increases to their
property tax bills next year. (Shane Fowler/CBC)
Peter
Jongeneelen, co-chair of ACORN New Brunswick, says some tenants have
seen big increases in rent as landlords have enjoyed protections
limiting how much their property taxes can be raised each year. (Submitted by Peter Jongeneelen)
Green Party MLA and housing critic Megan Mitton says there needs to be 'spike protection for tenants as well.' (Ed Hunter/CBC)
New
Brunswick Finance Minister Ernie Steeves announced in 2022 his
government was cutting the provincial property tax rate in half. (Jacques Poitras/CBC)
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