Halifax staff propose 5.9% property tax increase

[Half-Axed]

Originally Posted by IanWatson

Your actual taxes paid would be subject to the cap though, no?

Ah yes.

I wonder what it will be this year though as it is based on the consumer price index which usually changes 2% ish year over year but is pushing 5% this year. (No idea what calculation they use to get from CPI to the cap.)

That said, something based on 5% certainly sounds better than the 25% I had myself bracing for.

Thanks for the reminder.

[Saul Goode]

Originally Posted by Half-Axed

(No idea what calculation they use to get from CPI to the cap.)

It's actually very straightforward and is written right into s.45A of the Assessment Act. The assessor simply adds to last year's value "...the percentage increase as of December 1st in the immediately preceding municipal taxation year in the Consumer Price Index for Nova Scotia published by Statistics Canada relative to that Index...".

[someone123]

Originally Posted by Keith P.

The rate is derived from the amount of the assessment roll and HRM's desired total revenue. So it is totally a function of the other two things, of which HRM has control of the revenue part of the equation. In and of itself, however, the rate is meaningless year over year as those other two items are the variables that determine it. All that should matter to the property owner is the amount of the tax bill.

It's true in aggregate but not true of each taxpayer. The distribution of taxes paid can vary from year to year. Assessment caps will make this even more complicated; the new buyers for example might have to take on a much larger tax burden. When the city is growing by 2% a year, assessments by 20-30%, and the context is a 3% increase in revenue, this can definitely be a significant part of the picture.

As others have said inflation also matters a lot. We are currently in a higher inflation economy and so the nominal dollar amount collected in taxes will go up faster given a fixed real taxation level.

My earlier comment was partly about how the coverage style in that CBC article (the original I read and got an impression from; I'm not sure about all the later changes) seemed to be more about pulling out shocking-sounding numbers (some of which seemed like errors) rather than laying out the facts and context and letting readers come to their own conclusions. I think if one wanted to communicate clearly one would publish the tax rates, something about assessments and how they're changing, and what the resulting budget is expected to be. Then put the stuff about how HRM spending is/isn't shocking into an explicitly labelled opinion piece. The CBC in particular should have high journalistic standards, in part because we are all paying for it. Maybe they edited the story not just because HRM communications people badgered them but because the original seemed to have errors in it (isn't it odd how the journalism errors always seem to pull stories in a more clickbait-y direction?).

[Saul Goode]

Originally Posted by someone123

It's true in aggregate but not true of each taxpayer. The distribution of taxes paid can vary from year to year. Assessment caps will make this even more complicated; the new buyers for example might have to take on a much larger tax burden. When the city is growing by 2% a year, assessments by 20-30%, and the context is a 3% increase in revenue, this can definitely be a significant part of the picture.

As others have said inflation also matters a lot. We are currently in a higher inflation economy and so the nominal dollar amount collected in taxes will go up faster given a fixed real taxation level.

Indeed. And the cap really does distort everything. It's an abomination, ill-conceived, its downstream effects utterly predictable (and in fact predicted), but irresistible to politicians constitutionally incapable of seeing beyond 4-5 years (i.e., an election cycle). These days there probably isn't a provincial politician anywhere in NS willing to do what needs to be done - kill the thing - politicians also being notoriously gutless, though a number of municipalities have recognized the cap for what it is.

It's intriguing to consider what exactly will happen with assessments this year, depending on how the politicos want the news to land.

The assessment roll is to be filed by 31 December, and typically it's done days or weeks ahead of that. But the Minister has the power to arbitrarily extend that date (up to 31 March), which he could do if the government wanted some additional time to see which way the wind is blowing.

Also, the setting of the base date is a matter wholly within the discretion of the Director of Assessment, so can be changed easily and quickly without the need for amending legislation or getting orders-in-council issued. So theoretically, at least, she (the Director) could, for example, decree that the base date for 2022 could remain 1 Jan 2020, neatly side-stepping the COVID-era market explosion.

I'd bet against either of those things happening, but they technically are possibilities, and these are extremely unusual times, so who knows?

One thing a lot of people forget is that commercial property assessments aren't capped and that could be a big factor this year - especially for apartment buildings whose owners are only allowed rent increases which undoubtedly will be less even than the inflation rate, let alone the market (and hence assessment) increases. Pile a property tax increase on top of rent control and see how well that flies...

As I mentioned the other day, I do find it interesting that no preliminary assessment information was published this year, presumably to keep a lid on bad news and keep the pols' heads out of the line of fire for an extra few months.

[IanWatson]

Originally Posted by Half-Axed

That said, something based on 5% certainly sounds better than the 25% I had myself bracing for.

Thanks for the reminder.

As Saul says above, the cap system is pretty terrible on a societal level, and certainly favours those people who are fortunate enough to own their own home and have been there a long while. It creates a lot of bad economic distortions.

However, as one of those people I am selfishly thankful for it this year...

Originally Posted by Saul Goode

One thing a lot of people forget is that commercial property assessments aren't capped and that could be a big factor this year - especially for apartment buildings whose owners are only allowed rent increases which undoubtedly will be less even than the inflation rate

Kevin Russel (Invest Property Owners Association) is quoted in AllNS today complaining about this very thing.

[Saul Goode]

Originally Posted by IanWatson

However, as one of those people I am selfishly thankful for it this year...

I definitely know that feeling; I've benefited from the cap since its inception.

But in good conscience I can't support it. It's just not defensible.

[kzt79]

Originally Posted by Keith P.

... For decades HRM council members have got up on their hind legs at budget debate and brayed ...

Dying laughing over here at this choice of words. Accurate image, captures the situation perfectly, and I agree entirely with what you are saying. They are absolutely addicted to wasting tax dollars!