Phased-in property assessment program aims to spur development of rental units01 November 2022
FREDERICTON (GNB) – The provincial government has introduced legislation meant to encourage more development of rental units and alleviate supply-and-demand cost pressures faced by tenants.
Proposed amendments to the Assessment Act include placing phased-in assessment values on newly constructed apartment buildings with two or more units and existing buildings being refurbished to add more rental units. The assessments for these buildings would be set at 33 per cent of their actual value in the first year, 66 per cent in the second year and 100 per cent in year three.
“As part of a provincewide approach to address affordable housing, we are introducing measures to encourage the development of new rental units,” said Service New Brunswick Minister Jill Green. “Increasing the supply of rental units will help reduce pressures on the rental market and decrease costs that would normally be passed on to tenants.”
Qualifying properties would have to meet the following criteria:
- The property must be non-owner-occupied and include at least two rental units.
- Construction costs for existing buildings being converted into multi-unit buildings or are adding units must equal at least 20 per cent of the property’s assessed value before work begins.
- Vacant multi-unit buildings being restored must have been vacant for at least two years.
- A building permit must be issued on or after Jan. 1, 2022, with construction beginning no later than Dec. 31 of the year the permit was issued.
Property owners who have undertaken such work during 2022 would be able to apply for the program after it receives Royal Assent, which is expected in December.
The proposed legislation is in addition to the property tax relief measure introduced earlier this year for owners of eligible residential rental properties (four units or more) and non-residential properties (businesses/industry).
A spike protection mechanism is currently in place for most owner-occupied residential properties having an assessment increase greater than 10 per cent. This mechanism was implemented in 2013 to protect eligible homeowners from significant one-year spikes in their assessment.
As new construction and major renovations are excluded from the property tax relief program and spike protection mechanism, providing relief to these property owners would help offset the increase in property taxes for those who are most affected and encourage private sector businesses to develop new rental units, said Green.
To support tenants and ensure they also benefit from the property tax measures, the government implemented a temporary cap on rent increases for 2022 and legislation requiring landlords to provide an acceptable reason to end a tenancy.
“Once the rent cap has expired, tenants will continue to be protected by measures introduced late last year, including the Residential Tenancies Tribunal having the authority to review and deny new rent amounts outside market value,” said Green.
More information on property assessments is available by visiting www.myNBpropertyassessment.ca or calling 1-888-762-8600.01-11-22