“I have no idea what’s going on,” the Saint John councilor said. Donna Reardon, frequent critic of Service New Brunswick’s appraisal of properties in Saint John. “It doesn’t make sense when I look at the numbers. If there is a systemic bias against Saint John when it comes to property valuation, then we have a real problem. ”
Reardon was reacting to news that a historic office and apartment building at 1 Charlotte Street had been sold for $ 935,000 to a Prince Edward Island company on December 17.
This is one of many record property sales in the city in 2020 that have convinced local authorities that the tax base is increasing, but which Service New Brunswick has yet to reflect in its own assessments.
For 2021, the agency assessed 1 rue Charlotte as having a market value of $ 404,600. That’s over half a million dollars less than his selling price, and the same valuation he gave the building last year.
Fueling frustrations with real estate appraisals
Each $ 100,000 of the assessed value of a property by Service New Brunswick is worth $ 1,785 to the city in property tax on residential and apartment buildings and $ 2,678 on commercial properties.
“It’s a huge problem,” Reardon said.
Frustrations over valuations of properties like 1 Charlotte St. in the city have simmered for weeks.
In October, the province released its findings on municipal tax bases for 2021 based on property assessments and estimates provided by Service New Brunswick.
The agency’s finding of 0.1% total property value growth in Saint John for 2021 ranked 78th among municipalities in the province, barely better than the small southern New Brunswick village of Meductic, with a population of less than 200 inhabitants.
The discovery meant that there would be virtually no growth in property tax revenue for the city for its 2021 budget. It also stunned Saint John officials, given what they believed to have been a hot real estate market for. summer and near-record spending on new construction projects in the city.
“It’s incredibly frustrating,” said Saint John Mayor Don Darling at the time. “We want to have confidence in the rating system. People want to trust him. [I’m] so, so disappointed. ”
Since then, Saint John’s real estate markets have only gotten hotter and hotter, reinforcing suspicions that Service New Brunswick made a significant error in its valuation of the city’s properties and is misleading the municipality. necessary tax revenue.
According to the New Brunswick Real Estate Association, 2020 was a banner year for property sales and prices in all regions of the province, including Saint John.
He says agents in southern New Brunswick sold 225 properties in November, 30% more than last November and at prices that were on average 9% higher.
“Home sales continued to defy expectations in November,” Corey Breau, president of the Saint John Real Estate Board, said in a statement last month. “2020 has been a record year for our region. ”
Local real estate agent Charlotte Pierce said it was her experience too.
“We’re not looking for individual selling prices,” says Service NB
In a transaction in December, Pierce said she had clients interested in a multi-family property on Clarendon Street, which was valued by the province at $ 133,100.
The property received 10 offers and sold for $ 163,000.
“We weren’t very lucky after that,” said Pierce, who found demand and prices to be high.
“This has been a common theme throughout the purchases of a lot of properties, especially multi-units. It has really been very busy during the summer and fall with buildings, especially four or more units. ”
For 2021, Service New Brunswick valued the Clarendon Street property well below its selling price at $ 135,700, a 1.95% increase from its 2020 valuation.
City officials see nothing of what happened in 2020 in local real estate that supports a conclusion that total property values rose 0.1%, but Service New Brunswick said individual sales can be misleading.
Some deals are not arm’s length, the agency said, and sometimes buyers overpay in a way that would skew valuations if passed at face value.
“Property Assessment Services use a mass assessment methodology to assess all properties in New Brunswick. We are not looking for individual selling prices, ”Service New Brunswick said in an email.
“Chasing individual selling prices would have a significant impact on our current system and could be devastating for establishing fair market value. ”