is one of the province’s major urban centres. But unlike other areas, Fredericton boasts a property tax rate of $1.42 per $100 of assessment.
A favourite for retirees, Fredericton also enjoys a booming student rental market thanks to the presence of the University of New Brunswick. The provincial government is also a top employer in the area.
Property taxes in Fredericton
are presently at a reasonable rate, and have remained that waysince 2010. The reason for this, says city councillor Bruce Grandy, who also serves as the Chair of the Finance and Administration Committee, was due to some changes designed to streamline the city’s economy.
“We haven’t increased our property taxes since 2010, and even when we did prior to that, it was by only half a cent,” he says.
“We’ve also changed the culture of our organization here in the city. We’ve been leaning out our operation and rationalizing the workforce, understanding that the economy is at one of its more challenging points.”
Similar to other areas, Fredericton
’s property tax rate is directly affected by several factors, the most predominant of which is the performance of its real estate market.
“Everything is based upon the real estate sales in the different areas of the city, and the government takes on the assessment process,” says councillor Grandy.
“They look at the market sales over the last few years, see where the trends are going, and do their assessments from there.”
Investors looking for affordable properties will find many in Fredericton
. City assessment statistics indicate that the city’s average price is $214,900 [June 2014] and according to CMHC market data, the average rent for a three-bedroom apartment is $1,000.
In terms of the city’s best buy, investors may want to focus on multi-family properties, advises councillor Grandy. These can generate strong returns over time, and the units can be rented out fairly quickly, especially to older tenants.
“At this point, with the aging population, there are a large number of rural residents moving to the urban parts of the province,” he says. “The baby boomers are starting to get rid of their larger houses and move into condominiums, townhouses and other rental units.”
The provincial government's decision to make significant reductions to grant money given to cities has created a challenging situation for municipal governments. Despite that, councillor Grandy has a positive outlook for Fredericton
“Over the last three years, the government has decided to take $4.5 million out of our unconditional grant pool, which will leave us with a total of $1.5 million for grants,” he says.
“We’ve been efficient and proactive with saving money, investing in infrastructure, and making our city one of the best places to live.”
Property tax rate:
$1,000 (three-bedroom apartment)
Find out more about the Fredericton market using CREW's free online investment hotspot tool
This article was originally published in the June 2014 issue of Canadian Real Estate Wealth magazine
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Located in the west-central part of New Brunswick,