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Knowing how much you will pay in property tax is vital, considering the wide variance in tax rates from one province to another. In New Brunswick, real property is subject to annual assessment to determine the real and true value for tax purposes. According to the Real Property Tax Act, all owners of real property are required to pay their property taxes. Other legislations that govern property taxes in NB include Assessment Act and Real Property Transfer Tax Act. All provinces in Canada implement federal property taxes and other local rates. In the next sections, we explore New Brunswick property tax, including current tax rates and how NB compares with other provinces.
What Is A Property Tax?
Property taxes are paid by individuals who own the property and are based on the property's value. In most cases, property tax is imposed on land and real estate, but many jurisdictions also target tangible property, including yachts. It is a type of ad-valorem tax, meaning it is based on an assessed property value. In New Brunswick, property tax is referred to as real property tax and defined as real property tax, calculated based on the real and true value of the property. Real property can fall under a residential or non-residential property.Easy, fast, and even fun. Wealthsimple Tax is CRA-certified tax software that you’ll actually want to use. And you only pay what you want, no catch — get started.
Owners of real property or lease one from the crown are expected to pay property taxes unless the property falls under exemptions in Section 4 of the Assessment Act. If the property is used both for residential and non-residential purposes, the Property Assessment Services executive director will determine the portion attributable to each. This ensures taxpayers are protected from paying excess tax on residential homes. The local government uses property tax towards services that help the community, such as funding water and sewer improvement projects, fire protection, law enforcement, road and highway improvement, libraries, etc.
What Is the Property Tax Rates in New Brunswick?
Property taxes are calculated based on various factors and the calculation is different for each province. In New Brunswick, the establishment of assessment base and tax rates is based on the following key aspects:
Assessed value – SNB (Service New Brunswick) is tasked with assessing all real property in NB to determine the true and real value of each property. The assessed value is used in calculations for the following year's property taxes.
Provincial rates – NB provincial tax rates are regulated by the Real Property Tax Act. Currently, the tax rate for residential housing is $1.1233 per $100 of the assessed value and $1.2173 or other residential property. Non-residential property tax rate is $2.1860 per $100 of assessed value. Property owners will also incur an additional $0.0194 per $100 of assessed value to help offset the assessment cost.
Local rates (municipal/rural) – The SNB will provide a total property assessment base to the Department of Environment and Local Government. This is required for each municipal and rural community and is used to prepare the upcoming annual budget and local tax rates. In New Brunswick, non-residential property is taxed at a rate of 1.5 times the residential property rate. The rate varies each year, as determined by the Department of Environment and Local Government and municipals.
Special rates in LSDs and rural communities – This special levy is imposed on property in Local Service Districts (LSDs) and rural communities. The rate for non-residential property is 1.5 times that of residential property and also varies based on the levy fixed by the Minister of Environment and Local Government.
Other rates – There are various other rates imposed on property that fit unique situations. For instance, if the property is neither owner-occupied nor exempts under the Assessment Act, there'll be an additional $0.0486 per $100 of assessed value as per the Residential Tenancies Act. Similarly, property owners will pay a tax of $0.4115 per $100 of assessed value for owner-occupied residential property outside a municipality or former LSD now found in a rural community. There's an additional levy imposed on non-residential property as per the Business Improvement Areas Act. This tax is determined by the Business Improvement Area (BIA) Corporations and must not exceed $20 per $100 of assessed value.
In summary, New Brunswick property tax rate is based on provincial rate, local (municipal/rural) rate and special rates in LSDs. No tax is levied on residential owner-occupied property that sits on less than 0.5 hectares. However, if your property sits on more than 0.5 hectares, the usual $1.1233 provincial rate applies.
How Does NB Compare to Other Provinces?
New Brunswick imposes some of the highest property tax rates in Canada, with Saint John and Fredericton leading the country. Residents of Fredericton, NB pay average property taxes of 1.42110%, second only to Saint John, which collects up to 1.78500% in taxes. This translates into around $4,463 for property valued at $250,000 and $17,850 for property valued at $1,000,000. There's no doubt NB real property owners pay more than the rest of the country, especially compared to cities like Vancouver, where the property tax rate is 0.24683%.
However, residents of Vancouver face steep property prices. The average home price is well above $1 million, while home prices in NB cities, such as Fredericton, average below $250,000. This can make a significant difference, considering property taxes are calculated based on the assessed value of the house. On the surface, it seems like property owners in Fredericton and Saint John are paying high taxes. Nonetheless, a property worth $250,000 in NB is probably worth a million in BC, which creates a balance when calculating property taxes.
Other areas that pay low property taxes include Abbotsford, Victoria and Kelowna, all in BC, followed by Toronto, ON and Calgary, AB. St. John's, NFLD comes next at 0.73000%. Hamilton and London, ON both pay high property taxes of 1.26196% and 1.35082%, respectively, only trailing cities in New Brunswick. Overall, NB pays the highest property taxes in Canada. The tax is based on various rates, including provincial, rural and local service district rates. However, property costs way less in New Brunswick than anywhere else in the country.Wealthsimple Tax is a simple way to file your taxes. File your return with confidence it’s done right, and pay what you want—there’s no catch.
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