The Holt government just introduced a complex new formula for calculating property taxes in New Brunswick. Starting in 2027, this legislation changes how municipalities handle rising property values. According to a recent report from CBC News, the province will automatically lower municipal tax rates when local property assessments rise faster than inflation.

Ending the Revenue Windfall

For years, municipalities treated rising property values as automatic revenue windfalls. Councils watched tax revenues climb without having to vote on a rate increase. The new rules reverse this process. If your community sees a massive spike in assessments, the province steps in and applies an automatic discount to the tax rate.

Local Government Minister Aaron Kennedy says this makes the system fairer. “When assessments go up, the tax rate should come down,” Kennedy said.

If a municipality needs more money, the elected council must hold a public vote to raise the rate back up. They have to justify the increase to you directly in an open forum.

The Saint John Perspective

The reforms also adjust the relationship between residential and commercial tax rates. Right now, municipalities cannot set residential rates more than 41 percent below commercial and industrial rates. The new legislation pushes that limit to 50 percent. This gives cities a bit more breathing room to lower homeowner taxes without slashing industrial rates.

However, this incremental change falls short of what local leaders wanted. Saint John officials pushed for a complete separation of residential and industrial tax rates. Mayor Donna Reardon called the update a disappointment.

“It’s not what we wanted,” Reardon said. “I don’t see this as a strengthening exercise for municipalities.”

Left on the Cutting Room Floor

The new legislation ignores the uneven tax burden placed on new homeowners. Currently, long time homeowners enjoy assessment protections that cap their tax increases. Young families buying their first homes do not get these protections. They often pay significantly more property tax than their neighbors for similar homes.

An expert report flagged this as a major fairness issue. Kennedy dismissed the concern, stating it only affects a small number of people.

Frequently Asked Questions

When do the new property tax rules take effect?

The changes begin in the 2027 taxation year.

Will my property taxes go down?

If your local property assessments rise faster than inflation, the province will automatically lower the municipal tax rate. However, your city council can still vote to raise the rate back up if they need the revenue.

Why is the Saint John Mayor disappointed?

Mayor Donna Reardon wanted the province to completely separate residential tax rates from heavy industry tax rates. The new rules only loosen the connection slightly, keeping the two rates tied together.

Are first time homebuyers getting tax relief?

No. The new legislation does not change the current system that denies assessment protections to new homeowners.