Committee mulling assessment cap inequities
Paige Hoveling of the Nova Scotia Association of Realtors shared a tale about a pair of
Cape Breton Regional Municipal neighbours who live in identical duplex units.
One unit owner is a new homebuyer while the neighbour has lived there for more than a decade.
“The new owners are paying more than $1,000 a year more in property taxes,” Hoveling said. “This is a duplex, this home is a mirror image of its neighbour. They have the same size lot, they receive the same services. The only difference is (one) bought the house last year.”
Hoveling related that story to the all-party committee struck to review the Capped Assessment Program. Hoveling was one of more than a dozen presenters making their case at the conference that stretches out over three half-day sessions at the Westin Nova Scotia Hotel.
Most are pointing to the inequities of the province’s Capped Assessment Program, introduced in 2005 in an effort to protect property owners from sudden and dramatic assessment increases.
The committee will review the Nova Scotia Federation of Municipality’s proposal to incrementally phase out the CAP over a 13-year period. NSFM says the CAP had has outlived its purpose and now forces tax overpayments on 54 per cent of Nova Scotians to subsidize others.
“It’s unfair on many levels, not just neighbours with the exact same properties and one is paying sometimes 30 or 40 per cent more in taxes,” said Pam Mood, mayor of Yarmouth and president of the NSFM.
“New families coming in, seniors that are downsizing, all those pieces that people are going to pay more in taxes because of the capped property,” Mood said. “They are not always aware of that. Sometimes, it’s simply the shock of it.”
Mood said some homeowners are under the illusion that the program is saving them a lot of money.
“I would say this very clearly, if you are capped, two things, No. 1 because municipalities have to run on budgets, that we may up our taxes to make up for the difference. You’ll still, even though you are capped, pay more in taxes than you should," Mood said.
“No. 2 is the revenue neutral piece. At the same rate that the CAP comes off, the tax rate would go down in a municipality. So, you’re not going to have a great big increase in taxes. There is spike protection written in the proposal if the proposal goes forward. There is a low-income piece. We want to take care of our low-income people, our seniors.”
Hoveling said many seniors are penalized by the program.
“When they are downsizing, they are discovering that the property taxes on their new home is more than on their previous home,” she said.
“First-time homebuyers, they are not on the CAP at all. It’s really a consideration for them. How much am I going to be paying in taxes, not just on property taxes but deed transfer taxes.
“The CAP basically makes it more expensive to purchase homes in Nova Scotia. New homeowners are the losers.”
Kevin Russell says multi-unit apartment building owners and their renters are also losers under the CAP. He said property taxes are a budget line item like any other expense for apartment building owners and taxes have a direct impact on rents.
David Devenne, mayor of Mahone Bay, told the panel that someone has to pay for the CAP gaps.
"Young families that started to live in a two-bedroom bungalow when they first got married, had one child,” he said. “Now they’ve got three children and two rooms’ worth of hockey gear. They need a bigger house, same problem. They lose the CAP when they sell the house they are in and they have to take on a house that doesn’t have any CAP. That’s quite a daunting task.”
The actual residential assessments for 2019 in Mahone Bay was $129 million, Devenne said, increasing this year to $133 million. The capped assessments this year is $125 million.
The all-party committee Mood chairs includes Liberal MLA Keith Irving, Progressive Conservative Leader Tim Houston, NDP Leader Gary Burrill, Elizabeth Smith-McCrossin of the PCs and NDP member Lisa Roberts.
The committee will craft a report to be delivered to Municipal Affairs and Housing Minister Chuck Porter before the Feb. 20 return of the legislature.
“We’re all at the same table together,” Mood said. “The CAP is simply bad policy so the recommendations going forward need to make sure to address that, that they speak to fairness, to equity and that we should all be on the same page."