Force landlords to pass on tax reduction, renters say

Apartment owner says renters should not expect lower rents

CBC News

Posted: Sep 13, 2012 6:00 AM AT

Last Updated: Sep 13, 2012 10:48 AM AT

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A proposed provincial property tax reform for landlords is coming under fire by people who rent and who want to see their bills reduced.

The provincial government plans to reduce the amount of tax that is imposed on rental properties, commercial properties and second homes — what landlords have long referred to as “double taxation.”

But people who live in apartments, such as students, seniors and people on low incomes, may not see any rent reductions because landlords won’t be forced to pass on the savings to tenants.

Andrew Martel, the president of the University of New Brunswick Student Union, said the provincial government should force landlords to pass on the savings to students.

“The majority of those living here in Fredericton would feel safer knowing that these savings would come down to the students so that our rents wouldn’t be as high,” he said.

Local Government Minister Bruce Fitch announced a series of property tax reform proposals on Wednesday. (CBC)Local Government Minister Bruce Fitch, who announced the proposed reforms on Wednesday, said he hopes the tax cut is passed on as lower rent, but stressed that’s not up to him.

“We can affect the provincial tax rate on that particular building. We can’t directly pass that on to the renters,” Fitch said.

Willy Scholten, who speaks for apartment owners in the province, said he wouldn’t guarantee the double tax being reduced by about one quarter will translate into lower rents.

“The expectation would be this will have the ability to minimize rent increases,” he said.

The local government minister said tenants push landlords to share the tax cut, just as landlords successfully pushed the provincial government to make the cut.

The proposed package of reforms also includes a new “spike protection” mechanism to guard against large property tax assessment hikes, lifting the three-per-cent property tax freeze, and the option of monthly payments instead of one large annual payment.