A tree-covered property in Hanwell outside Fredericton that Service New Brunswick assessed to be worth $8,200 earlier this month — even though records show it sold for $242,500 last June — is highlighting the different ways landowners are being treated by the province's property tax system again this year.
Thousands of New Brunswick property owners are currently appealing their 2017 assessments, concerned provincial assessors have gone overboard trying to assign a "market value" to their home or business.
The province has taken an especially hard line on landlords, raising assessments more than 50 per cent in several cases to match the government's view of their property's true worth.
In Fredericton Gerald Wilson, an apartment owner, saw the assessed value of one of his buildings raised from $1.8 million to $2.8 million [55 per cent] and got little sympathy when he complained to a Service New Brunswick official.
"His reasoning was that I wasn't paying enough tax all along anyway," said Wilson.
But that's not the case for owners of more than 70,000 forest properties whose assessments have been set well below market value for several years and have been frozen by the province again in 2017.
Assessments frozen since 1993
The assessment of forest properties was set in legislation at $100 per hectare in 1993 and has not changed since, even though they now routinely sell for 10 times that amount and more.
It is not known exactly how much of a tax break owners of forest land will receive this year from low assessments because the province does not track the true value of forest land.
"We're not concerned with the overall market value of those properties because legislation dictates [their worth]," said Stephen Ward, the province's director of property valuation. "We don't look at any woodland."
New Brunswick property tax records show more than 400 forest properties were bought in the province last year and all but 14 of those were sold for more than their assessed value.
Sold for 30 times more than assessment
On Fredericton's Currie Avenue, one forest property is assessed by the province at $5,000 even though it was sold for 30 times that [$150,000] in December. It's a sharp contrast to the hard line the province is taking on the assessment of Wilson's apartment building on the other side of the city.
There are about three million hectares of privately owned forest property in New Brunswick including very large landowners like J.D. Irving Ltd. [725,000 hectares] and Acadian Timber [308,000] and thousands of small woodlot owners and all benefit from undervalued assessments.
Andrew Clark is a former president of the New Brunswick Federation of Woodlot Owners and says $100 per hectare is not far from a true market value for forest property, without counting the value of the trees.
"The way they're taxing it is basically for owning the land itself and not for the inventory that's on it," said Clark. "Do you charge property tax on the inventory that's in a store or just on the store property itself?"