Quote:
Originally Posted by Keith P.
Assessment caps (known otherwise as homestead exemptions) are hardly unique to NS and exist in many places that saw big jumps in property values well beyond the usual rates due to an overheated market, such as in parts of California but in many others as well. Here they first occurred along the coastline when values of those properties skyrocketed once outside capital discovered they would be valuable things to buy. Someone living in what started out as a turn of the century fishing shack on the oceanside were taxed out of their home. This is no different when the prices of houses in parts of HRM doubled or tripled once the immigration-fueled population explosion happened here. As I'm sure you know, it does not affect the total revenue of HRM, it just changes the distribution of who has to provide it. If you bought a million-dollar property on the coast, your neighbor who has owned their property next door for all their life pays much less in taxes than you do for reasons of not wanting the longtime residents forced out of their home because of excessive taxation. But the municipality's ravenous hunger for revenue is unaffected as those who can afford to feed it are now on the hook to do so. This year's debacle during the HRM budget process shows just how out of control our Council and municipal bureaucracy is when it comes to spending. They only know how to move that in one direction and make no attempt to curb its growth. Capital/infrastructure projects are still funded by bond issues, not operating revenue and so are largely unaffected.
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We always hear about grandma in the fishing shack but actually the biggest winners of assessment caps are high value homes owned by wealthy folks, while the losers are relatively less wealthy younger people who are buying into the market.
The argument behind it doesn't really make sense as HRM can adjust the mill rate. If every home goes up by 2x then the rate can drop to 0.5x and there is no actual tax impact. Instead what we have is a system of winners and losers and so the mill rate cannot be adjusted in this way, and some people's bills are much higher than others for the same services.
Another problem is that this system discourages people from moving, so it's often not great even for the seniors whose properties might not suit their needs as retired empty nesters, and it gums up the entire property market and "ladder".
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