RIVERPORT DISTRICT BOARD OF TRADE
RIVERPORT, NOVA SCOTIA
PUBLIC MEETING
TO DISCUSS
RESIDENTIAL ASSESSMENT
IN
THE MUNICIPALITY OF THE DISTRICT OF LUNENBURG
(RIVERPORT AREA)
HELD AT
RIVERPORT AND DISTRICT COMMUNITY CENTRE
23 OCTOBER 2001
The Riverport District Board of Trade sponsored a public meeting for the purpose of discussing residential assessment in the The Municipality of the District of Lunenburg and specifically in the Riverport area.
The meeting was held as a result of the reaction of residents to the proposed 2002 property assessments received by residents. The escalating property assessments have been of concern to those in the community but the present notices indicated phenomenal increases, some reported to be in the 300-400% range.
In excess of 200 residents attended the meeting held on Tuesday 23 Oct 2001 at the Riverport Community Centre. A panel was invited to attend. The panel members were:
` Hon Michael Baker, MLA, Member for Lunenburg
Mr. John MacKay, Executive Director Assessment Services
Kathy Gillis, Director of Assessment Services
Vernon Oakley, Regional Manager, Assessment Services
Joe Southern, Supervisor, Residential Assessment
MLA Don Downe, MLA for Lunenburg West and Mr. Jack Wentzell, Warden of the Municipality of the District of Lunenburg also attended the meeting.
During the meeting commitments were made by:
-The Riverport District Board of Trade. The Board of Trade committed to produce a report on the proceedings of the meeting and to propose a solution to the assessment issue.
- Hon Michael Baker, MLA. Mr. Baker committed to raise the assessment issue in the Conservative caucus and to arrange a meeting with The Municipal Council of The Municipality of the District of Lunenburg to discuss the issue.
- MLA Don Downe. Mr. Downe committed to raise the assessment issue in the Liberal caucus and in the House of Assembly. He further committed to work with Mr Baker, in particular at the meeting with Mr Baker and the Municipal Council of The Municipality of the District of Lunenburg.
- Jack Wentzell, Warden of The Municipality of the District of Lunenburg. Mr. Wentzell made a personal commitment and committed the Municipal Council to pursue an equitable solution for the residents of the Municipality. He further committed to a meeting with Mr Baker and Mr. Downe and Council.
Why did residents attend the meeting?
They attended because they are concerned about their future and their children’s future. They are angry with what is perceived as an unfair system. There is anxiety, and there is a desire to contribute a solution to the problem.
This report is divided into sections reflecting the topics discussed during the meeting.
ASSESSMENTS
When interest rates climb by .25 of a percentage point it is national news, the markets react and dire predictions abound about the effect on the economy.
Some property assessment has gone up in excess of 300%! Should this not trigger alarm bells? This area has experienced these outrageous leaps in individual assessment values.
Property classifications are being changed by assessment offices. Properties are being changed from wood lots to building lots with the associated increase in assessment and rise in taxes. The classifications are being changed without consultation with the property owner or a change of use of the property.
Why are assessments rising at such an outrageous rate?
The South shore has been discovered and expensive homes are being built on property in the area. Property values have increased as a result of purchasers who are prepared to pay whatever it takes in order to get what they want, regardless of value, especially waterfront property.
Assessors are attributing a “fair market value” to a neighbouring house based on the assessed value of a newly built home or the price someone is willing to pay for land. In many cases the residential assessment is based on the sale of land or a dwelling that is not in the same neighbourhood. In some cases one dwelling may not even be in sight of the one which has influenced the assessment on the house.
There is resentment toward a system that penalizes a property owner for improving their home. Minor improvements have resulted in assessment increases that exceed the value of the improvement. One resident wrote:
“Why should I pay higher taxes if I make my property look better? As it stands now, I am penalized for making improvements. Would my assessment be reduced if I tipped over a junked truck in my front yard and threw an old refrigerator out there? That would foul the view, so shouldn’t it reduce the value?”
Residents are not aware of what constitutes an improvement and what is normal maintenance. Repainting a house certainly improves the appearance. Is this an assessable “improvement”? Are newly planted trees and shrubs that make a house more attractive an assessable improvement?
Assessments that are increasing by excessive amounts on an annual basis cause property owners to question the fairness of the taxation system
ASSESSMENT DEPARTMENT ATTITUDE
Comment after comment was offered concerning the Department of Service Nova Scotia and Municipal Relations, Assessment Department. It was obvious from the comments that the Public Servants in the Assessment Department have little respect for the public they are employed to serve. It became apparent that the question of residential assessment is complicated by the attitude of the Department employees.
Reports of rudeness, threatening / intimidating comments and disrespectful attitude of some Public Servants at the assessment office in Bridgewater were common themes from those attending the meeting. Concerned residents calling the assessment office to enquire about their assessment are being told that if he/she (assessment officer) comes out to caller’s house their (caller’s) assessment will increase. How does an 83 year old widow react to this sort of intimidation?
Some of the quotes attributed to the Assessment Department by residents at the meeting:
- Assessment officer telling one person his “taxes would double” if the officer came to do a personal assessment;
- “Would you sell your house for the assessed value”
- “We can come out and do an individual assessment of your property”
- “If you cannot afford it (your house) sell it to someone who can”
These statements made by Public Servants of the Assessment Department who wield power over residents are intimidating.
The demeanor of the Assessment Department employees has generated fear and resignation in residents. This was evident from the comments made at the meeting:
- “Talk to them (Assessment Department) all you want – won’t do any good”
- “I’m not attending that meeting (Board of Trade meeting 23 Oct) – they (Assessment Department) will get me (raise my taxes)”
- “Why should I do anything to improve my house, it will cost me more”
- People can’t or will not ask questions. “Why is my neighbour’s house, which is the same as mine, assessed at $89,000 and mine is $250,000?” They are afraid to ask the question for fear of prejudicing their neighbour.
The Regional Manager for Assessment Services, Mr. Vernon Oakley produced statistics showing that assessment appeals were down from previous years. He attributed this to satisfaction with assessments. Given the comments above, it is not satisfaction but fear and resignation that has reduced the appeals. Mr. Oakley indicated that there were only 13 assessment appeals from the Upper Kingsburg area. Residents from that area at the meeting were surprised at this figure. Subsequent comments from the residents could account for a number far in excess of that figure.
Mr. MacKay, the Executive Director of Assessment Services, was insensitive to the concerns of the residents in attendance at the meeting. Despite having heard resident after resident relate instances of mistreatment by his Bridgewater Assessment Office he proceeded to defend their behaviour with a lengthy explanation of the “sensitivity” training all the staff receive. Repeated requests from the audience for an apology to the residents went unheeded as he proceeded to explain how the market value assessment methodology had just celebrated it’s 50 th year of use in Toronto and that California has a market value based assessment. He left it to Mr. Baker to apologize on behalf of The Department of Service Nova Scotia and Municipal Relations and the Government. Mr. MacKay’s attitude did not inspire those present to believe the attitude of the Assessment Department would change in the very near future.
Footnote:
Subsequent to the meeting of 23 Oct the Hon Angus MacIssac, Minister responsible for residential assessment has made comments regarding the assessment issue.
The press on Fri, Nov 9, 2001 reported that Mr. MacIssac made a statement to the effect that he would sell if he had a property assessed as high as Mr. Creaser’s. The comment was in regard to a question raised in the house by NDP MLA Bill Esterbrooks concerning the high assessments of two South Shore residents. The concept that Mr. Creaser does not wish to sell his property appears to have been lost on the Minister.
On 12 Nov. 2001 Mr. MacIssac in responding to a reporter’s question stated “Appeals of assessment is going down and values are being confirmed reasonably well.” The comments in the above paragraph concerning the reduction in assessment appeals in the Bridgewater office provide a possible explanation for this apparent reduction.
It is disturbing to note that the attitudes of the public servants in the Assessment Department are reflected by the Minister in charge of the Department. This does raise questions of where change must be initiated.
ASSESSMENT AREA
What is my house being compared to when my assessment is being determined?
About 4-5 years ago there was a change in how residential assessments were to be set. It was at that time that market value became the guide. The Riverport District board of Trade thought it was of enough concern at that time to hold a public meeting on the subject. Representatives of the Bridgewater Assessment Office were invited to the meeting. There was concern at that time because houses were being built on Oxner Hill (in the Riverport area) and rumor had it that they would be expensive homes. Residents were concerned that these few homes would drive the assessment of the whole area of Riverport. We were assured that the Assessment Department was very aware of the situation and that there was no cause for concern. The Assessment Department representative explained that the Department looks at housing groups as small as 3-4 houses and that the newer houses would be looked at in isolation, and further, that houses would be assessed comparative to houses immediately adjacent.
The reply from the Bridgewater assessment office to a resident who was questioning why his 2001 assessment had jumped by $18,500.00 was that all the assessments along the LaHave River had increased by that or similar value. When asked why the caller was told “because you are on the river”.
What has changed since the above meeting that has the Assessment Department assessing the entire LaHave River as one area? Who made the decision?
It appears that “the neighbourhood “ now extends from Bridgewater to Lunenburg and up and down the LaHave River.
Why should the building of an expensive house impact on the assessment of other homes in the area? Many people questioned the “community of interest” used by the assessment office when establishing assessment value of properties. They felt that new expensive houses were affecting their assessments with no correlation between the houses.
Why should a similar house on the river be assessed at a higher rate than a similar house located on Grimm Rd.? Residents do not accept the concept of “water view” as a reason why their house, which has been on the river for 150 years, is assessed higher as a result of the historical settlement along the river.
.
“Because someone sells a property within a few kilometers of me at “windfall” prices, my assessment is raised. That is wrong. The increased assessment does not consider that my property looks nothing like the sold one, and has no relationship to it.”
If we are going to have fair taxes the system has to be changed, similar houses should have the same assessment regardless where the houses are located.
SOCIAL IMPACT ON COMMUNITY
The most insidious impact of the escalating assessments is on the social fabric of the very communities Governments are created to protect.
The soaring assessment values and the subsequent increases in Municipal taxation as a result of the assessment increases are threatening to drive residents out of the homes and off the lands that have been in their families since the first settlers in the region. Hardest hit are the elderly, in most cases widows, who are on a fixed income. These people cannot afford the taxation increases and they are confused and frightened.
A young resident of Feltzen South (between Riverport and Lunenburg) related the situation his family finds itself. Feltzen South has also “been discovered”. Real estate values have escalated to obscene levels. The Assessment Department has applied assessments to all properties based on the escalated real estate sales. This young resident’s parents are being so heavily assessed on land to the point they can’t afford to keep it. The land has been in the family for generations. Their son is not able to take the land because he wouldn’t be able to afford taxes. As this young resident phrased it, ”I may have to sell my house and move inland to the woods to escape high taxes.” People feel that they will be unable to leave their property to their heirs because they cannot afford the taxes to keep the land and their heirs may not be able to keep it due to the taxes. High assessments are driving both the elderly & the young away from family homes & the area. Not everyone wants to sell their birthright just because someone comes along and offers them a small fortune to do so.
In the long term there will be an impact on schools, volunteer fire departments, etc. We live in an area that is serviced by a volunteer fire department. If the younger generation cannot afford to live here who will be the firefighters and rescue service? It will not be those who are causing this assessment problem, for the most part they “live” here for less than one-quarter of the year. What will happen to the schools? People 50 plus seldom provide the school enrolment. Part time residents don’t leave their children here to be educated. If youth cannot remain in the area the school age population will decrease, schools will close and another important segment of the fabric of a small community will disappear. Residential properties, in addition to being the main unit of municipal taxation, are homes, where families are raised. Families are at the heart of healthy communities, and ensure these have a future as well as a present and a past. Peg municipal taxes to a value that is as capricious and volatile as those produced by the current real estate market in Nova Scotia and it becomes impossible for the current inhabitants to afford to live in their existing communities. The character of the communities will change, and in the extreme the communities as we know them will die as the old and young move out, and their homes are bought for summer homes or are abandoned.
“I thank God that I have been privileged to own property on the beautiful Lahave River, property I purchased from my father and property I would like to pass on to my children/grandchildren. However, if the current trends continue, and the fact that I am approaching retirement with income diminishing and taxes and other expenses increasing unrealistically – how would you view the future?”
PROPOSED SOLUTION
This is not a problem that can wait for a solution! The problems being created by the current assessment methods and assessment values are real time problems and are here today. Immediate action is required now before residents are forced to make decisions they truly do not wish to make and will regret. People recognize that they must pay taxes what they wish to see is a fair tax system. Solutions that have been proposed center around the concept of value at the time a property changes hands and assessment based on that price not on the value of a house down the road. Assessment should not be market driven by the MLS Real Estate directory.
The following proposals for changes in the method by which residential assessments in Nova Scotia are derived are presented for consideration:
1. Fix residential assessments at the year 2000 level. This would be universal with the exception of properties which have sold since the 2000 levels were established. The market price will have been established by the sale price of the properties in question. This would relieve the anxiety of residents. This would allow time for the necessary reviews of the Assessment Act and process and amendments to the Municipal Taxation system to be put in place.
2. Limit annual increases to a rate that is fixed by a recognized economic indicator. Some jurisdictions have fixed the increase to a maximum level, eg 3%. The annual increase could be tied to increases in the provincial Consumer’s Price index.
3. Discontinue the practice of assessing houses and land based on a ‘like” property having been sold in the area. Reassess the real market value of residential properties when they change hands. A purchaser who pays a price for land or a house has willingly paid that price and acknowledges that this is the value to them. The selling price establishes the assessed value for the new owner, and the tax rate is applied to that assessment. If a neighbour makes improvements or sells his/her property, that should not result in higher assessments and taxes for houses in the area.
4. Create a “grandfather” clause to ensure that properties can be passed between generations without an immediate assessment increase and resulting tax burden that makes it impossible for children to retain property they have inherited.
The proposed changes are not for consideration for the South Shore or coastal communities only but for all of Nova Scotia. The objective of these changes is to ensure that citizens may reasonably expect to continue to live in their homes. This recognizes that most people do not wish to sell their homes. Residents of Nova Scotia must feel secure and not held hostage by the vagaries of the real estate market. Homes only become marketable commodities when the owners decide to sell and the home changes ownership.
The problem is with us. The time for Government action is now. The government does not wish to be found guilty of knowing the problem but having done nothing about it. To paraphrase Winston Churchill:” Governments are not elected to preside over the demise of communities”. On the contrary, their task is to nurture and preserve the communities. There is a real danger that the tax system will begin shaping the community, when it should be the other way about. If left unaltered it will present us with the paradox that people will only be able to afford their homes once they have sold them! Government has the opportunity and the obligation to redress this.
RESIDENTIAL ASSESSMENT
IF YOU ARE CONCERNED ABOUT YOUR SOARING RESIDENTIAL ASSESSMENT WRITE OR CALL THE PREMIER YOUR MLA AND THE MINISTER RESPONSIBLE FOR THE ASSESSMENT ACT. LET THEM KNOW THAT YOU ARE CONCERNED AND UPSET.
IT IS ONLY BY YOUR ACTIONS THAT CHANGES CAN BE EFFECTED!
Hon. John F. Hamm (PC) Telephone: (902) 424-6600
Office of the Premier FAX: (902) 424-7648
7th Floor, One Government Place E-Mail: premier@gov.ns.ca
1645 Granville Street
P.O. Box 726
Halifax, N.S., B3J 2T3
Hon. Michael G. Baker (PC) Telephone: (902) 424-4044
Department of Justice FAX: (902) 424-0510
4th Floor, Terminal Building E-Mail: bakermg@gov.ns.ca
5151 Terminal Road
P.O. Box 7 10 Pelham St.,Lunenburg,NS,B0J 2C0
Halifax, N.S. B3J 2L6 Telephone: 634-4199
Hon. Angus MacIsaac (PC) Telephone: (902) 424-5550
Department of Service Nova Scotia FAX: (902) 424-0581
And Municipal Relations E-Mail: macisaaa@gov.ns.ca
Summit Place, 4th Floor
1601 Lower Water Street
P.O.Box 216
Halifax, N.S. B3J 2M4
Don Downe (L) Telephone: (902) 424-9637
Liberal Caucus Office FAX: (902) 424-0539
Bank of Montreal Bldg., Suite 1402 E-Mail: downedr@gov.ns.ca
5151 George Street
Box 741 410 King St.,Bridgewater, NS, B4V 1A9
Halifax, N.S. B3J 2T3 Telephone: 543-5443
Riverport District Board of Trade
Assessment Sub-Committee
“WORKING FOR THE COMMUNITY”