'Clearly there's an issue': Calls continue for provincial review of property assessment cap

A provincial review of Nova Scotia's capped assessment program for municipal property taxes is still being debated, but municipalities will first have to sell the idea to wary Nova Scotians.

The cap was introduced in 2005 to deal with unpredictable spikes in property assessments, particularly for waterfront properties. The current rules limit annual increases based on the consumer price index.

The cap for 2017 was 1.4 per cent.

But the cap is lifted if a house is put on the market or if there are renovations. That has created situations where the owners of two homes with near-identical market values on the same street may be paying vastly different property taxes.

"In the long run, it has had unintended consequences," said Laurie Murley, the outgoing president of the Union of Nova Scotia Municipalities (UNSM), which represents the province's 50 municipalities.

Young families and seniors

The UNSM has long argued that the system has created inequalities for homeowners across the province.

In particular, Murley said the cap is creating problems for young families looking to buy their first home, who don't always factor in higher property taxes, or seniors who are looking to downsize.

"They could potentially pay more in tax in that new, smaller home," she said. "So clearly there's an issue." 

Municipal leaders voted unanimously in favour of a provincial review last week at the 2017 UNSM fall conference.

Halifax's regional council has been also pushing for a review, voting last month to send a formal request letter.

Municipal Affairs Minister Derek Mombourquette, who spoke at the UNSM conference, did not shut the door on the idea.

"I'm certainly open to discussing options," he said. "I recognize there exist challenges to the cap." 

In an email to CBC News, a spokesperson with the Department of Municipal Affairs went a step further, saying it is "essential for Nova Scotians to better understand that while the CAP is working for some homeowners, it's not working for everyone."

The statement went on to say it is up to the UNSM and its members to "undertake this task" of educating the public about the system and why changes might be needed.

Nova Scotia's municipal leaders have already been educating people and will continue to do so, Murley said, adding that she remains hopeful a provincial review will take place soon.

According to a number of municipal officials, any changes should be phased in and new programs created to help longtime, low-income homeowners deal with assessment increases.