Saint John realtor proposes tax holiday on new properties

A Saint John realtorsays legislation should be changed to give property developers a tax holiday until their units are sold.

Hodges Hamm believes such an incentive would encourage more construction in the city, and could actually generate more tax money in the long run.

"There's really no money lost to the province," he said.

Hamm suggests assessments be kept low on improved building lots and newhousing construction until the propertiesare sold.Under the current system, developers begin to pay full property taxes as soon as they improve a lot or complete a housing unit.

Hamm says it can take several years to sell properties, which becomes a disincentive for developers.

"Even though he hasn't sold the lot he now has this encumbrance on him to pay the taxes that are assessed on that particular property," he said.

Hamm presented the idea in a letter to Saint John common council on Monday, and urged the city to raise the issue with the provincial government.

Local government reforms under discussion

Hamm'sproposal isn't allowed under current provincial legislation, and the city can't offer tax holidays on its own, said city manager Pat Woods.

"We don't have the authority to provide tax relief, so that would be problematic," he said.

However, Coun. Shirley McAlary says she likes the idea.

"The developer would win, the new homeowners would win, the city would win, the province would win," McAlary said.

"I think we have to think of new ideas in this day and age in order to make the city and the province more attractive."

Coun. Bill Farrensuggested the city introduce other kinds of development incentives instead.

"Let's think outside the box, call it whatyou want, and let's move on it," Farren said.

Farren says the city canoffer grant money, which can be recovered later through increased assessments.

Lisa Harrity, a spokesperson for the Department of Environment and Local Government, says the province is in talks with municipal associations about reformingthe Municipalities Act and Community Planning Act.

But the issue of a tax holiday is not currently part of those discussions, according toRaymond Murphy, theexecutive director of the Union of New Brunswick Municipalities.

Harrity says adraft framework has been prepared, but nothing has been decided and there is no time frame for coming up with a plan.