Where is the property tax hike in Halifax, Canada?

Every week, Mansion Global poses a tax question to real estate tax lawyers. Here is this week’s question.

Q. Can you explain the property tax proposal in Halifax, Canada?

A. A 5.9% property tax increase has been proposed for the 2022-2023 budget for Halifax, Canada, which includes a climate action tax, the first of its kind. However, some officials have called for a lower increase of 3.7%.

At the end of November, a budget plan was submitted to the city’s regional council that would increase the property tax rate to 2.9%, according to the document submitted by Jacques Dubé, the council’s general manager.

That’s a significant increase from the nominal 0.9% increase in the property tax rate in 2021-22, but some officials say falling incomes and the need to act on climate change have made the necessary 5.9% increase.

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“The 2022-2023 financial framework was designed in the face of one of the most complex financial environments the municipality has ever experienced,” said Mr. Dubé in the budget proposal. “These changes are designed to address the triple challenge of emerging from the pandemic; finance the costs associated with growth, in particular infrastructure; and provide significant support to unfunded climate change initiatives.

Indeed, the new budget proposes an additional Climate Action Tax of 3%, which would bring the planned rate of 2.9% to a total of 5.9%.

“This is one of the largest funds in [Halifax’s] story…it is intended to bring the full resources of the organization to bear on climate change through initiatives such as electric vehicles, net zero buildings, multimodal transit corridors and other initiatives,” according to proposal. “To staff’s knowledge, this is the only property tax in Canada dedicated to climate change.

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According to the budget, Halifax homeowners with an affordable home averaging CA$262,700 (US$203,305) would pay CA$121 a year.

Mayor Mike Savage said he would not support the 5.9% increase and instead asked, along with the budget committee, Mr. Dubé and his staff to prepare “an additional report regarding options for reduce the final increase in the average property tax bill from 5.9% to 3.7%”. The new proposal would seek to adjust the amount of funds allocated to capital projects, as well as their timing and other costs.

Council will begin its budget debate, taking public input into account, in February. The final budget is expected to be completed on April 12, 2022.

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Penny D. Jackson