New Brunswick tenants stung by rent increases after soaring property taxes say they don’t necessarily benefit when their landlords get tax refunds.
Property taxes were increased this year after several botched assessments by Service New Brunswick.
“It would be nice if they returned it,” said a Moncton tenant of ML Rentals Ltd. Their landlord increased the rent by $ 25 per month to pay for a tax increase on the building. But this tax hike has now been repealed.
The tenant asked not to be identified for fear of reprisal from his landlord, but said notices were placed in letterboxes last spring at Sunnyside Terrace apartments, indicating rent increases were needed to pay for the sudden rise in property taxes.
Those [long-term] people are already paying a lot less than the market and it is on them that I raised the rent. I hate to do it, but I did.– Julien LeBlanc
There was no other information that the increase was withdrawn and no rent reduction.
“There was a letter sent around stating that property taxes had been increased and the rent would subsequently be increased,” the tenant said.
“I was not aware of the refund.”
ML Rentals owner gets tax refund
Property tax records show the 24-unit ML Rentals-owned apartment complex on Shediac Road received a $ 6,807 property tax increase in March after the province’s new assessment system calculated an increase of $ 240,000 in its market value.
ML Rentals owner Julien LeBlanc said he told some long-time tenants that the tax increase required a rent increase, but he also started a battle with the province over the tax bill.
Last month he won this fight.
The province acknowledged that the value of its property on Shediac Road had actually gone down – not increased – and it got a 115% ($ 7,870) property tax refund on the buildings, but decided not to. not reduce the rents that funded the initial tax increase.
“This discount that I got sets the stage for the next two years. There will certainly not be an increase for some time now,” he said on Friday.
“I was hoping for a flood of calls”
LeBlanc said the rent increases only affected long-term tenants whose rents had fallen below current market levels and were not really caused by the tax increase.
Rent increases were coming anyway, he says. He said tenants had been told the increases were specifically caused by the tax hike in an attempt to get them to join a long-running fight between homeowners and the province over property tax rates for them. apartment buildings.
Unlike houses, apartment buildings pay two property taxes, municipal and provincial, and owners have campaigned for the repeal of the provincial portion for several years. LeBlanc says he thought he could get tenants to support this fight if he blamed the rent increases on property taxes.
It’s still $ 11,000 [tax] increase and we are faced with ever increasing costs for water, sewerage, electricity and insurance.—Michael Zabywalski
“I was hoping for a flood of calls to our government officials,” said LeBlanc.
“Yes, their rents went up by $ 25, but they still pay $ 50 less than their neighbors because of their loyalty. When people move out, that’s usually when I increase the rents.”
“Those [long-term] people are already paying a lot less than the market and it is on them that I raised the rent. I hate to do it, but I did. “
“OK, I earn more”
In Fredericton, owner Michael Zabywalski also decided not to reimburse the rent increases after getting a partial refund of his tax increase.
Zabywalski sent letters to all tenants at his 45-unit apartment building on McKnight Street in March, explaining he was being forced to raise their rents after the province hit him with a $ 32,600 increase in his bill property tax.
“Due to the large increase in property tax this year, I am forced to increase the rent,” he wrote, advising all tenants that they should pay an additional $ 30 per month from 1st of July.
This covered about half of the tax increase, and Zabywalski explained that he would cover the remaining $ 16,000 himself.
But Zabywalski also challenged the province, saying the tax increase was unfair. Last month, he got an acknowledgment that his initial contribution was wrong and that he received a tax refund of $ 22,000.
Because this was only a partial refund and the property’s tax bill is still $ 10,600 higher than last year, Zabywalski said he decided to leave the increases of rent in place to pay for other expenses.
“It’s still $ 11,000 [tax] increase and we see ever increasing costs for water, sewerage, electricity and insurance, ”he said.
“Okay, I’m earning more, but it’s more than getting kidnapped on the other end.”
Irene Murphy is one of Zabywalski’s tenants and is not happy with how the property tax increase has affected people like her, but mostly blames the province – not her landlord.
“We were the ones who paid for their mistake,” said Murphy.
Service New Brunswick has been forced to reduce assessed values and taxes on more than 10,000 properties since the first bills were issued last March, including those for hundreds of apartment buildings.
There is no central record of the number of tenants who obtained rent increases due to property tax increases which were subsequently repealed.