CBRM official wants tax cap program to include duplexes

A senior official with the Cape Breton Regional Municipality says a cap put in place by the Nova Scotia government to protect homeowners from sharp increases in property taxes should also apply to smaller income properties like duplexes.

Marie Walsh, the chief administrative officer with CBRM, said developers are less likely to build new income properties because of this exemption.

"They've come to me saying the business case is no longer there," she said. "[The] rent would have to be so high that it wouldn't be affordable for people to move in."

The capped assessment program was implemented in 2005.

Walsh said fewer duplexes are being constructed, which means there aren't as many rental options for seniors looking to downsize.

She said she's heard from developers that the property taxes on a new duplex are twice what they are on existing ones they have, "so they've stopped building them."

The Nova Scotia Federation of Municipalities has also raised concerns about the cap in the past and said it creates inequalities for homeowners across the province.

Kevin Russell, the executive director of the Investment Property Owners Association of Nova Scotia, said when owners have to pay higher property taxes, they pass those costs along to the tenants.

The association wants a review of the cap because they believe it discourages contractors from building and owning small investment properties.

The association has asked for a review of the cap in the past, suggesting it should apply to all residential buildings.

Canada Mortgage and Housing Corporation's market statistics show Sydney's vacancy rate is 5.1 per cent, which is an all-time low, said Russell. He said the number will drop if the cap continues to discourage new construction.

In an email, Department of Municipal Affairs spokesperson Krista Higdon defended the program.

"The intended beneficiaries of the program are homeowners, not investment properties," she wrote.

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