More than 40K N.B. homeowners face another wave of property tax increases in 2025
Provincial rules preventing municipalities from targeting tax help to homeowners remain in force
New Brunswick homeowners by the tens of thousands are facing property tax increases in 2025, and New Brunswick municipalities remain without powers promised to them two elections ago that could help slow or even stop the surge.
Andrew Black, president of the Union of the Municipalities of New Brunswick, said hope has faded that municipal financial reforms — first pledged by Blaine Higgs in 2018 — will arrive before a new wave of property tax increases wash over homeowners in large numbers again next year.
"That's unrealistic, unfortunately," said Black, in an interview, about the chances New Brunswick might implement promised municipal financial reforms this year.
"Municipalities would like that to be in place before the start of the new year but it's unrealistic in the conversation and the process that's going on now."
Communities all over New Brunswick have experienced record increases in property values over the last three years, mostly on homes and apartment buildings.
That has led to rising assessments on those properties, and municipalities are having difficulty preventing much of those increases from forcing taxes higher.
Fifth Street in Moncton is typical.
Rising property values in the area neighbourhoods caused tax assessments on the street to jump an average of 18 per cent in 2022, 20 per cent in 2023 and another 18 per cent this year.
Robert Caverly bought a house on Fifth Street in 2021, but in June he sold it and moved across the provincial border to a spot near Amherst, Nova Scotia. He cites rising residential property taxes as a major reason.
"We were actually planning on staying in Moncton," said Caverly in an interview.
"But it's like we decided, you know, with the increase in the taxes, that was a big thing."
At the time Caverly bought his Moncton house it carried a municipal tax bill of $2,060, based on an assessed value of $123,400. This year the assessment was up to $316,700, and the bill he received had nearly doubled to $3,947.
About $400 of the tax increase was caused by Caverly building a garage, valued at $28,000, on the property.
But most of the increase, more than $1,400 worth, was caused by the tax assessment on the house itself escalating rapidly, and residential property tax rates in the city of Moncton are not falling fast enough to compensate.
More concerning for Caverly was that the increases were not going to stop.
New Brunswick has a rule that unless a house is substantially renovated or changes owners, property taxes on large assessment increases have to be applied gradually, by a maximum of 10 per cent per year.
In Caverly's case that rule meant $43,097 of the $193,300 increase in the taxable value of his Moncton house, over three years, was sheltered from being taxed in 2024.
But in 2025 and 2026, had he kept the house, those protections would expire and, at current Moncton property tax rates, an additional $621 in tax would be applied to the house, potentially raising the annual tax bill to more than $4,500.
For Caverly, the prospect of five straight years of compounding tax increases was too much.
"What additional services were they providing to have that kind of increase?" he asks.
"That was just ridiculous."
Large assessment increases, causing delayed property tax increases a year or two after assessments have risen, is something that Black is worried most homeowners are not prepared for.
"I would say, based on my personal experience and who I've spoken with in my municipality, I think that [most] people don't understand." said Black.
"Some people do understand, but there's a lot of people who don't. Most of the time people are shocked by that."
Property records show that assessments on residential properties in Moncton have risen steeply in virtually all neighbourhoods, and there are now more than 17,000 houses in the city on a time delay for property tax increases in 2025.
On many Moncton streets, like Knox Drive, every house is in that situation.
The 26 homes on Knox have had their property taxes increase by about $400 over the last three years because of assessment increases, but that is a fraction of what is coming.
Unless Moncton drops its tax rate further, homeowners on Knox Drive are facing additional average increases of $1,000 each over the next three years because of assessment increases.
And it is not just Moncton.
In Fredericton, more than 11,000 homes are facing their own 2025 property tax increases for similar reasons. In Dieppe, at least another 6,000 houses are in that position, and in Saint John it's more than 14,000.
Jerry Iwanus says what is happening with property assessments and taxes on homes in New Brunswick proves the system needs major reforms.
Iwanus is a former property assessor who has worked in multiple provinces, including New Brunswick, and he recently wrote a book, called Taxing New Brunswick, that offers advice on how to challenge a property assessment in the province.
Iwanus is adamant there is no reason for rising assessments on homes to cause tax increases for homeowners.
"There is no way to sugar coat this: the property assessment and tax system in New Brunswick is broken," he writes in his book.
In an interview, Iwanus said if property assessments on houses and apartments buildings are surging, municipalities need to have the freedom to drop tax rates on those buildings. That, he said, would fix the problem of runaway property tax bills, in a way that phasing in large increases only delays.
"Overall, if residential assessments increase by 40 per cent, then you lower the tax rate by 40 per cent. That's revenue neutral," said Iwanus.
"The system needs to be changed to include different tax rates for different property classes. So the municipalities actually have some flexibility in that regard."
In Canada most municipalities have the power to neutralize the cost of rising assessments on houses by cutting property tax rates that apply to houses.
But in New Brunswick, property tax rates on houses are connected with tax rates on commercial, government and industrial properties and are difficult to adjust independently.
Currently, New Brunswick municipalities are not allowed to set property tax rates on houses any lower than 58.8 per cent of what business properties are taxed in their community.
Last year that rule forced Saint John city council to cut property tax rates on commercial, industrial and government properties in order to lower tax rates for homeowners.
In the end, only about $2.1 million of a $3.8 million tax cut passed by the city made its way to houses and apartment buildings because of that.
Saint John finance commissioner Kevin Fudge told councillors during budget deliberations the city was powerless to direct tax cuts where it wanted.
"We would really like to have no restrictions and set what we want to set," Fudge told councillors at the meeting.
"We would like the ability to set as many classes as we want and set the rates the way we want, based on what works for the City of Saint John."
That is close to what was promised during the 2018 provincial election. Progressive Conservatives pledged to "empower municipalities to have greater control over their own affairs, including greater powers over taxation."
After winning that election, a second commitment was made to have financial reforms in place by January 2025 but that time table has been abandoned.
In an email, a spokesperson for the province said talks with municipalities about financial reforms are ongoing but that any changes that come will be for the 2026 calendar year.
ABOUT THE AUTHOR
