'They've seen so much go wrong:' Federation calls for cap on property-tax bills

New Brunswickers have lost confidence in the property assessment system, especially after the government's most recent mistakes, the Canadian Taxpayers Federation said Monday as it called for tax bills tied to the inflation rate.

"They've seen so much go wrong with these assessments that no longer people believe in the system anymore, and it demands real change," Kevin Lacey, the Atlantic director of the federation, said in an interview with Information Morning Fredericton.

Lacey was referring to problems that continue to arise with 2017 property assessments, including about 2,400 bills that were miscalculated, as well as tax-bill increases that have stunned property owners.

CBC has reported some homeowners seeing their assessments go up by 30 per cent and some landlords wondering how they'll handle increases of more than 50 per cent.

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"Government can't sweep these problems under the rug," Lacey said. "They have to address them."

Property assessment cap 

His group has recommend the province follow Nova Scotia's lead and bring in a property assessment cap for taxation purposes.

This would mean tax bills would not go up by more than the inflation rate. An assessment would not change until a house was sold, and the sale price became the new assessed value.

"Every year when the assessments come out, depending on what the inflation rate is … your tax bill will only go up by the rate of inflation," Lacey said.  

He said he's hopeful government is open to the idea.

"What you're getting is an increase in the cost of inflation, which is the same cost that we all face," he said. "I don't think governments are giving anything up in this."

These assessments go up, the tax bill goes up, their services don't get any better and yet government is raking in all the revenue.-Kevin Lacey

He said the property assessment cap would allow the system to be more predictable, especially when people are purchasing homes.

People can look at a home and make decisions based on the mortgage rate and whether they can afford the tax rate.

He said the cap would also increase accountability. If lawmakers decide they want taxes to increase, they'd have to raise the property tax rate, he said.  

"That would allow average taxpayers or organizations like mine … to weigh in and have a political debate about those tax increases.

"There's an issue here with regards to accountability. Taxpayers should get the tax rate they deserve."

Assessment mistakes

The Liberal government has said that mistakes this year were no more numerous that previous years, but it is providing more time for appeals for property owners whose assessments are being recalculated.

Service New Brunswick said the 2,400 property owners it identified as having received incorrect bills will get new bills.  

But Lacey also believes government needs to tackle the issue of miscalculations by creating an agency, separate from government, to do the assessments.

A problem with the current system, he said, is it has no way of measuring people's ability to pay or whether they can afford increases.

A lot of New Brunswickers are facing big assessment increases and they want to know why, what the money is for and whether the bills are fair.

"It's time to take those out of government and create an arm's-length agency that would do assessments for the province," he said.

Lacey said the assessment agency would be run by an independent body consisting of average New Brunswickers who would hold the agency accountable. This would also empower New Brunswickers to take over the assessment process themselves, he said.

Lacey used the example of a senior couple, living on a fixed income in what has been their Fredericton home for 25 to 35 years. As as a result of changes in the real estate market, their assessments go up in a big way, without any changes to their income or personal finances. 

"That's the type of people that really get hit when these assessments go up and these tax bills go along with it," Lacey said. "They can't afford it."

He said the same goes for working families who are living paycheque to paycheque.

"These assessments go up, the tax bill goes up, their services don't get any better, and yet government is raking in all the revenue."