FREDERICTON – The New Brunswick Apartment Owners Association (NBAOA) has had no luck getting successive provincial governments to drop the double tax on rental properties. Now it’s come up with a novel proposal that should get the attention, and perhaps the support of renters: a rent freeze for three years in return for scrapping the double tax.
This would save the average renter around $1,800 over that time period, association president Willy Scholten said in a press release.
Landlords have long argued that the double tax already gets passed onto renters in the former of higher rents.
“This double property tax needs to be removed,” said Scholten. “The cost gets passed to the tenants – about two months of their rent goes directly to the provincial government to pay double property taxes every year.
The association’s latest proposal highlights that reality by promising a rent freeze in exchange for reduced taxes.
“If the government eliminates the double property tax over a three-year period, New Brunswick’s apartment owners will give their tenants a three-year freeze on rent. And to ensure this is applied consistently, we are asking the government to legislate this rent freeze.”
Non-owner-occupied buildings are currently taxed municipally and provincially. New Brunswick is the only province that does so.
The taxes for non-owner-occupied apartments in New Brunswick are almost twice as high as those in the rest of the Maritimes, and more than 2.5 times higher than those in the rest of the country, the NBAOA said.
The NBAOA said property tax is the single largest cost for nearly all landlords in New Brunswick and some 250,000 renters end up getting the short end of the stick.
“We just want a level playing field,” says Scholten. “This tax issue has been dogging apartment owners in the province for years. There’s no reason for it – and worse – it’s hurting New Brunswick’s economy and its growth potential.”
According to the association, the double taxes on rental properties generate less than 1 per cent of government revenues, but they affect more than one-third of the population.
Removing the tax over three years could mean more investments for the province, the association said.
Currently, the NBAOA said the double property tax is discouraging real estate developers from looking at opportunities in New Brunswick at a time when it needs economic and population growth, as well as better housing supply.