N.S. property value assessments in the mail with overall increase

N.S. property assessments come out With assessments in the mail, property owners in N.S. are about to find out how much their property values have shot up.

The total value of residential properties in Nova Scotia this year is going up 21 per cent overall -- double last year.

According to Nova Scotia’s independent assessment authority, specific increases vary by municipality, with the Halifax area among those seeing significant jumps.

“It's the largest increase we've seen in a number of years,” says Lloyd MacLeod, director of assessments for the Property Valuation Services Corporation.

MacLeod says as a whole it’s a reflection of many factors - including the hot housing market in 2021.

Property assessments for 2023 are based on sales and financial data from 2021, along with the physical state of properties as of Dec. 1, 2022.

“Interest rates at the time were lower, and there was a high demand for properties and a low supply of properties available,” says MacLeod.

“I think it has a bigger impact on those that essentially have purchased over the last 18 months,” says James Dwyer, realtor with Engel & Volkers North American Real Estate.

Dwyer says it could lead to sticker shock for new homeowners who didn't build this into their budget and didn’t receive a full explanation on how property reassessment after purchase could affect their purchase.

“When you get to year two, the assessment will really take effect on your home, and the other element too is that the cap will be lifted, so it can be quite jaw dropping and shocking to see that tax assessment and property tax bill in year two,” he says.

“But the good side to that is that in year three, the cap does get reapplied and it will go back down,” he adds.

That cap is applied by the province, but it's a figure based on inflation, set this year at 7.7 per cent, which is more than last year.

But the cap doesn’t apply to every property.

“Apartment buildings, rental accommodations, none of those are covered,” says Patrick Sullivan, president and CEO of the Halifax Chamber of Commerce.

That’s why he would like the cap system phased out. Sullivan says it doesn't address the current financial crunch on home and business owners once you add in runaway inflation and increased interest rates.

“And frankly, the Nova Scotia Federation of Municipalities says the same thing, because it's a problem for smaller municipalities as well,” he says.

The province’s cap on the taxable amount also does not apply to commercial properties -- another concern for Sullivan.

“We’ve seen significant increases for businesses this year, we’ve seen CPP go up, we’ve seen EI go up, fuel costs are up significantly, and now we’re seeing valuation costs go up. These will ultimately likely be passed on to the consumer and we’ll see greater inflation.”

“Also to those on fixed incomes, with the cap rate,” says Dwyer. “Which was designed to protect those people, due to the fact that the rate is based on inflationary numbers, this year and next year we could see some concerns with those on fixed incomes in regards to increases in their property taxes.”

“An increase in assessment does not necessarily of course mean that your taxes will go up,” says MacLeod of the PVSC.

That’s because property value assessments are just one piece of a municipality's tax puzzle.

The total tax bill is only determined once a town or city decides how much money it needs to keep things running.

In the case of the Halifax municipality, in an email, city spokesperson Klara Needler says, “The Assessment Roll will not change the debated tax bill increase, as assessment increases were anticipated and estimated into these options.”

The city has not made any decision on property taxes for this year as of yet. Last November, city staff recommended an eight per cent increase across the board, citing “significant economic headwinds.” At the time, Halifax Mayor Mike Savage said he would try to limit any hike or adjust the tax rate to make up for any increase.

The city will finalize its budget this spring.