New Brunswick's Land Taxes: Non-Resident Owners

New Brunswick imposes some of the highest property tax rates in Canada. However, this doesn't necessarily mean that residents have the highest tax bills. Property tax is based on a property's value and is paid by property owners. In New Brunswick, property tax is referred to as real property tax. The amount of property tax paid by property owners is based on the assessed value, provincial rates, local rates, and other rates. Non-residential properties pay about three times as much property tax per $100 of assessment as homeowners.

Land Transfer Tax

The Land Transfer Tax (LTT) in New Brunswick, also known as the Real Property Transfer Tax, is a levy on the purchase of property. The tax is calculated as a percentage of the property's purchase price or assessed value, whichever is greater. The current rate for properties registered after April 1, 2016, is 1%, while properties registered earlier are taxed at lower rates, depending on when they were registered. The LTT is paid by the purchaser of the property and is due when the title is transferred.

There are some exemptions from the LTT. You may be exempt if your transfer is for a lease lasting under 25 years, the property is transferred between spouses or beneficiaries, or to a Crown Corporation, or if it is to pay off a loan or debt.

The LTT is a significant cost associated with buying a home and is often overlooked when calculating the total purchase amount. It is important to be aware of this tax and other fees and closing costs when budgeting for a home purchase in New Brunswick.

In addition to the LTT, there are other taxes and regulations to consider when purchasing property in New Brunswick. These include the Harmonized Sales Tax (HST), which is a combination of the Goods and Services Tax (GST) and the Provincial Sales Tax (PST), as well as various rebates and exemptions that may apply.

Property Tax Rates

The provincial property tax rates are legislated under the Real Property Tax Act. Effective January 1, 2023, the provincial rate on residential housing is set at $0.5617 per $100 of valuation, while the rate for other residential property is set at $1.0345. Non-residential property is subject to a provincial rate of $1.8560 per $100 of assessment. There is an additional provincial rate ($0.0194 per $100 valuation) charged to all taxpayers to help defray the cost of assessing properties.

Local and rural community rates are set by the Department of Environment and Local Government for each municipality and rural community. These rates are used to prepare the upcoming annual budget and set the local (municipal) property tax rate. In New Brunswick, non-residential property is taxed at a rate of one and one-half times the rate on residential property.

Local Service Districts (LSDs) and Rural Communities Provincial Rates are set annually by the Minister of Environment and Local Government. The rate applicable to non-residential property is one and one-half times the rate on residential property. Additionally, a tax of $0.4115 per $100 valuation is imposed on all owner-occupied residential property not within a municipality or a former LSD now located in a rural community or regional municipality.

There are also various other rates imposed on properties that fit unique situations. For example, there is a special levy imposed on properties in certain local service districts (LSDs) and rural communities. There is also a special tax on properties that are neither owner-occupied nor exempt under the Assessment Act (an additional $0.0486 per $100 of assessed value).

How to Calculate Property Tax in New Brunswick

To calculate the property tax in New Brunswick, you need to know the property tax rate that applies to your property and the assessed value of the property. The formula for calculating residential property tax is:

Residential property tax = RPT rate * assessed value of residential property.

For example, let's calculate the residential property tax for a $500,000 house in Fredericton, which has a residential tax rate of 1.42110%.

$500,000 x 1.42110% = $7,106

So, the residential property tax for this particular house in Fredericton would be $7,106.

Property Tax Notices

On the first working day of October each year, a Property Assessment Notice is mailed to all real property owners in the province. This notice shows the Real Property Assessment Value and details of the valuation. It is issued in three parts:

• The first part states the Real Property Assessment value as of 1 January of the taxation year.
• The second part provides detailed information on the valuation of the real property.
• The third part is for property owners to request a review of their Real Property Assessment value if they disagree with it. All requests must be submitted within 30 days of the mailing date on the Notice.

The Property Tax Notice (the tax bill) is then issued once a year, usually around March (the mailing date was 1 April for 2022). This notice shows the mailing date, payment deadline, penalty for overdue accounts, arrears due, credits, Business Improvement Area (BIA) rate (for non-residential buildings) and Residential Tenancy Fee.

The Tax Notice also includes a payment stub to be attached to the payment to ensure it is posted to the correct tax account.

Tax statements are issued from March to December each year. These statements do not have a payment deadline because their purpose is to acknowledge that the taxpayer already has overdue taxes.

How to Pay Property Taxes

Property tax in New Brunswick is referred to as "real property tax". It is based on the value of the property and is paid by property owners. The government uses the tax for services that benefit the community, such as funding water and sewer improvement projects, fire protection, law enforcement, road and highway improvement, and libraries.

Property tax rates in New Brunswick are based on provincial rates, local (municipal/rural) rates, Local Service Districts (LSD) provincial rates, and other rates. The amount of property tax paid by property owners is based on the assessed value of the property. Service New Brunswick (SNB) assesses all real property in the province to determine each property's true and real value.

Property tax notices are sent out in January of each year, and the tax is due quarterly in January, April, July, and October. Here are the ways you can pay your property taxes in New Brunswick:

• Over the counter or by mail: You can pay by cheque or money order, along with the payment stub from the bottom of your Tax Notice, to the following address: Department of Finance, Revenue and Taxation Division, P.O. Box 100, Fredericton, NB E3B 1B0. Ensure your Property Account Number (PAN) is written on each cheque. Do not send cash in the mail.
• Online through the Service New Brunswick (SNB) website: Payments can be made with Visa, MasterCard, Amex, Union Pay, or PayPal through the Pay Simply website. Ensure the Payment Recipient states: "PROV NB - PROPERTY TAXES", and enter your PAN for the account number. Pay Simply is a third-party service provider that charges a fee for this service.
• Your financial institution: Pay through online banking, telephone banking, ATM, or teller services.
• Property Tax Equalized Payment Plan (EPP): This is a payment method for property owners in arrears. It allows you to set up a payment arrangement that breaks your annual tax payment into 12 equal monthly payments. To establish a payment arrangement, apply by mail or call the Collection Services at 1-855-806-2472.
• In person: Payments can be made in person at City Hall.
• By AUTOPAY: You can set up autopay through your bank's online bill-pay service.
• By check through postal mail: Send a check through postal mail to pay your property taxes.

How New Brunswick Property Taxes Compare to Other Provinces

New Brunswick imposes some of the highest property tax rates in Canada, with Saint John (1.78500%) and Fredericton (1.42110%) leading the country. However, this doesn't necessarily mean that residents have the highest tax bills. For example, Vancouver property owners pay just 0.24683% in property taxes, but they face steep property prices, with the average home price well above $1 million. In contrast, home prices in New Brunswick cities like Fredericton average around $250,000.

Property taxes in Atlantic Canada are made up of two components: a municipal tax and a provincial tax. The former funds municipal expenditures, including city services, police, and local infrastructure, while the latter funds services such as education and healthcare.

In New Brunswick, property tax is referred to as "real property tax." It is based on the property's value and paid by property owners. The amount of property tax paid is determined by the following factors:

• Assessed value: Service New Brunswick (SNB) assesses all real property in the province to determine its true value.
• Provincial rates: Regulated by the Real Property Tax Act, the current tax rate for residential housing is $1.1233 per $100 of assessed value, $1.2173 for other residential property, and $2.1860 per $100 of assessed value for non-residential property.
• Local rates (municipal/rural): SNB provides a total property assessment base to the Department of Environment and Local Government, which is used to prepare the annual budget and local tax rates. Non-residential property is taxed at a rate of 1.5 times the residential property rate.
• Other rates: There are various other rates imposed on property that fit unique situations, such as special levies in certain local service districts (LSDs) and rural communities.

Compared to other provinces, New Brunswick businesses already pay high property taxes. A new tax on machinery and equipment will further increase property taxes for businesses that manufacture products in their facilities, making their property tax bills significantly higher than those of their competitors in other provinces.

Frequently asked questions