In New Brunswick, governments at both provincial and local levels have a role to play in property taxation and assessment, namely:
Learn more about property taxation and assessment
Your tax dollars at work in your community
Interested to know what your community spends on local services? For a detailed look at the budgets, assessment bases, tax rates and more for all 370 New Brunswick communities, please visit www.gnb.ca/localgovernment, click “Publications” and then scroll down to the Annual Report of Municipal Statistics.
The property assessment process in New Brunswick
At Service New Brunswick, we employ a team of assessors who review the property assessment value of more than 460,000 properties throughout New Brunswick each year.
Assessors look at a variety of factors when assessing your property, including the sale prices of homes or properties in your neighbourhood and any recent renovations or improvements that you may have made to your property. So, if local sale prices are increasing or you've done renovations, then it's very likely that your home or property has increased in value too.
Local sale prices can affect your property’s assessed value
When several properties in your neighbourhood sell for more than their assessed value, this suggests a higher value for all properties in that neighbourhood - even if no physical improvements have been made. We analyze these trends and use them to make adjustments to assessments to bring them in line with their new market value.
As real estate values in many areas of New Brunswick have been increasing over the last few years, assessments have grown to reflect these increased market values. Due in part to this, a cap was introduced in 2011 to limit increases in assessed value on owner-occupied properties up to a maximum of 3% per year.
In 2013, the 3% cap on assessments was removed in an effort to return to a market value based system over the long term. An Assessment Gap (Permanent Assessment Exemption) will apply to those properties that benefitted from the 3% cap. The Assessment Gap is calculated based on the difference between the 2012 market value and the 2012 capped value.
In addition, an Assessment Spike Protection mechanism is now in place to ensure property assessment growth occurs in a more stable and predictable manner for owner occupied properties. An assessment increase greater than 10 percent will be phased in over a period of time. All new construction and/ or major improvements made to a property are excluded from Assessment Spike Protection.
Looks can be deceiving
Your house and your neighbour's house may look very similar, but factors such as finished basements, age and quality of the building, and type of garage could result in a different assessment for each property. Even two seemingly identical houses can have very different assessments if they are located in different parts of a city, in a different community, or subjected to measurably different market forces. (Imagine the market value of your house in downtown Toronto or in St. Stephen - two neighbourhoods with very different real estate markets.) The bottom line is that an assessment is unique to each individual house or property. Find out more by comparing your assessment to others in your neighbourhood.
How property assessment factors into your tax bill
Property assessment, based on market value, plays a valuable and important role in paying for local and provincial services across the province. The assessed value of homes and other properties within a municipality or rural area make up what is known as the tax base.
As part of their annual municipal budget process, municipalities use their tax base to figure out what tax rate they need to use to cover their spending for the following year.
For most home owners within a municipality, your tax bill is largely a result of the following equation:
Provincial property tax on certain property types
For certain types of property, the provincial government also applies a tax to help cover the cost of provincially-provided services, such as road maintenance and snow removal. These properties include:
Market value and why assessments are based on it
Market value is the price that a property would likely sell for on the open real estate market at a given point in time - January 1st of each tax year. It is the most common method of property assessment used in North America today.
Assessments are based on market value because market value is transparent (real estate prices are published in the newspaper every day and sale prices are now public knowledge), easy to understand and a fair and realistic measure of a property's value.
Our assessors aren't actually determining market value; they are simply reflecting the values that have been established by buyers and sellers in local real estate markets across the province.
Factors that affect market value could include:
- property location (including nearness to green spaces, community services, and access)
- total finished floor area of a home
- lot size
- finished basement or lower level of home (finished floor, walls and ceiling)
- quality of construction - materials and labour
- age of building and abnormal depreciation
- existence and type of garage
- traffic influences or neighbourhood characteristics
- in the case of income producing properties, the income generated by that property