Land of the (tax) free

In 2006, the province of Nova Scotia capped property tax assessments for homeowners at the rate of inflation (CPI) for the following year. Those who own single family residences, duplexes, condominiums, nursing homes, seasonal dwellings, manufactured homes, and even vacant land have their property tax assessments capped at CPI, so that year to year the amount they pay in taxes doesn't increase at a rate greater than the average rate of increase in costs for other goods or services.

Unfortunately, this half-thought peice of legislation neglected a significant and important part of the population: tenants of rental units. Rental units are the only type of residential property not covered under the property tax assessment cap. First glance from a layperson might suggest that this makes sense, since landlords are profit-makers, and ought to be paying out to government. But economic theory says that whatever taxes suppliers (landlords) are stuck with are passed along to buyers (in this case renters). Landlords do end up absorbing some of the costs, but will indeed pass some along to tenants through increases in monthly rent.

Still don't get it? Thankfully Killam Properties have enlisted the services of Halifax's own PicnicFace to explain it to folks like you and me:







In Halifax, the issue is particularly concerning because of the state of the housing market, with values of homes and apartment buildings increasing substantially over the past decade, and no sign of a decrease in demand any time soon.

A cap on property tax assessments is neccessary as a short-term step to stablize rent prices in Halifax. We don't have data on the average prices of rental housing for students in the HRM, but its clear that if property tax assessments continue to increase we will see a rise in rent costs for tenants. This is a first step, and a very small step down the path of solving the housing problems faced by the city of Halifax and the province of Nova Scotia.