9.7% tax bill increase proposed for HRM property owners

HALIFAX, N.S. — Halifax Regional Municipality staff are proposing a 9.7 per cent increase for property tax bills for 2024-2025.

Budget direction documents were released on Friday ahead of the budget committee meeting on Monday.

In their report, staff say it’s due to rising inflation, “lower non-tax revenues” and continued population growth.

HRM’s population is expected to tip over the 500,000 mark during the next fiscal year, the eighth year in a row where growth has outpaced housing growth.

“The gap represents an increasing demand on services provided by the municipality whilst the base which tax is levied on is not growing at the same pace; the growth is not paying for growth or inflation,” staff wrote.

Because of salary increases and contract agreements along with an $11 million drop in deed transfer tax revenue and other pressures, staff say the budget shortfall in 2024-2025 is almost $105 million. The municipality’s debt to fund capital projects has reached $290 million going into the next fiscal year.

That would mean a tax bill increase of 15.2 per cent to cover it all, but staff are suggesting two moves that would bring the increase down to 9.7 per cent:

• $30 million reduction to capital-from-operating funding (which is directed capital projects, primarily roads)
• $7 million reduction to strategic initiative funding (which funds multi-year transformative and city building projects like rapid transit and Windsor Street Exchange redesign).

Any more reductions to the operating budget “will be challenging,” staff wrote, as most of the increased costs are considered fixed and non-controllable like contracts and debt servicing.

How much residents pay in property taxes is based on the taxable assessed value (determined Property Valuation Services Corporation) multiplied by the tax rate, which Halifax Regional Council determines through the budget process each year. 

The proposed increase is by no means set in stone. Each city department will build their budgets in the next few months. The Halifax Regional Police and RCMP have already released details of their budgets.

There will be a lot of fine-tuning before everything is finalized at the end of April.

Higher assessments

In January, residential property value assessments in HRM  jumped about 25 per cent and commercial assessments rose by 7.88 per cent.

At the time, Mayor Mike Savage said he wanted to make sure people aren’t freaking out as the tax rate will be adjusted because of the higher assessments.

“It is only one input into the taxes, and what I don’t want is for people at home to say, ‘Oh my gosh, assessments are up 25 per cent and my taxes are going up 25 per cent.’ They won’t,” Savage said.

“Last year the tax rate went down even though we generated more revenue.”

Year-over-year increases

Last November, staff proposed an eight per cent increase to the property tax rate but after adjustments and council debates, it landed at 5.9 per cent when it was approved in April. 

HRM’s 2023/24 budget was set at $1.2 billion, which includes an operating budget of about $980 million.

The year before (2022-2023), staff proposed a 5.9 per cent increase which included a three per cent climate action tax to fund projects outlined in HalifACT, the municipality’s climate action plan. The following April, that increase landed at 4.6 per cent.