New Brunswick introduces formula to adjust municipal property tax rates with assessments

New Brunswick will introduce a new formula for calculating municipal property taxes beginning in 2027. The formula will automatically lower tax rates when total assessed property values in a municipality rise faster than the rate of inflation. Under current rules, rising assessments increase tax revenue unless a council votes to reduce the rate.

The province stated that the change ends automatic revenue gains tied to higher assessments.

Rate adjustment and council vote requirement Local Government Minister Aaron Kennedy said the legislation creates a more transparent and stable system. He added that any municipality seeing a large assessment increase will receive an automatic rate reduction that councillors must vote publicly to override.

Kennedy noted that municipalities retain the ability to raise rates if additional revenue is needed, but the decision must occur through an open council vote.

Changes to residential and non-residential rate limits A second provision increases the allowable gap between residential and non-residential tax rates. Municipalities will be permitted to set residential rates up to 50 percent below commercial and industrial rates, up from the current 41 percent limit.

Saint John Mayor Donna Reardon said the change falls short of municipal requests for complete separation of residential and non-residential rates. She described the adjustment as incremental and stated it does not strengthen municipal authority. The reforms leave unchanged existing assessment protections that apply to most homeowners but not to all residents, including some first-time buyers.

Kennedy said the issue affects a small number of people.