The role of tax agents
At first glance, tax agents appear to play a critical role in challenging property assessments in New Brunswick, thereby keeping taxes in check. One firm, Turner Drake Partners, really takes the cake in how it has marketed its services in this regard:
“Property taxes typically comprise 42% of a building’s total operating costs: a staggering tax burden which will get heavier rather than lighter in the years ahead as property assessments climb, waves of civil servants retire, and municipalities grapple with funding their generous pension plans”.
(Note: this particular quote appeared at one point on the Turner Drake & Partners website but they have since removed it. However, the current write-up there gives a pretty good idea of the disdain with which they view the assessment profession. Also, note how non-generous some of those pension plans are becoming.)
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Leaving aside the fact that taxes shouldn’t increase just because assessments do, who would not cheer on someone with a mission to defend the poor, beleaguered taxpayer in this way?
Well, the truth is that, unless you are one of the mostly larger corporations who can afford the kind of representation that tax agents provide, you may not want to cheer too loudly.
In fact, Turner Drake’s current web page clearly states, “no homes, sorry!” so you’ll have to direct your cheering elsewhere anyway.
Who uses tax agents and who benefits?
It makes sense for companies who have many properties or properties that are large or complex to hire professional representation in the form of tax agents.
If the tax agent has proper evidence, assessors will often reduce the valuation of some of the larger concerns that they represent, either at the original Request for Assessment Review stage or later at the Appeal stage.
However, over a period of time, someone has to make up for all that forgone tax revenue that the larger corporations ultimately do not have to pay because of assessments being reduced in this way.
And it is mostly those taxpayers who either do not have the specific knowledge of how to make the system work in their favour or who cannot afford or otherwise access this type of representation who will inevitably foot the bill.
In other words, us average residential property owners.
Of course, anyone can hire a tax agent (or at least one who will do residential work). But how hard do you think an agent is going to work for the pittance that the effort would return on representing a single-family property owner relative to focussing on the potential income from one of the larger corporations that owns dozens, if not hundreds, of properties?
It’s not difficult to figure out who will get the attention here.
The hidden tax agent drain on public resources
"Bulk loading"
Another issue is the drain that tax agents place on government resources. Rather than submitting individual Requests for Assessment Review on properties that assessors really should reconsider, the system allows tax agents to “bulk load” their requests.
This means that Property Assessment Services receives many hundreds (and sometimes thousands) of these at a time. All require time to process, track, input, and research, but not all truly require attention and review.
Assessors spend an inordinate amount of time dealing with accounts that tax agents know very well are assessed at an acceptable level, but they submit these anyway.
If we add up all the time that assessors spend in dealing with unnecessary bulk-loaded reviews as a component of Service New Brunswick’s annual budget (in terms of both financial cost and time), the amount wasted would be staggering.
And we all pay for that wasted time, even though it flies well under the taxpayer and media radar.
Time away from other assessment work
Moreover, the time assessors spend on these accounts that the tax agents have bulk loaded and flagged for no real reason is time they are not spending doing other assessment work, such as re-inspections. And this is precisely the reason why assessors have not re-inspected some neighbourhoods for many years.
That chronic underassessment means that those communities, or the owners of particular property classes in those communities, are not paying their fair share of taxes – or that the tax burden is distributed inequitably – and, once again, others have to make up that difference.
The result is a broken system in which property owners have minimal confidence because they know that the valuations are either not remotely representative of market conditions or are valued unfairly relative to other properties.
Tax agent tail wagging the Assessment dog
None of this should be taken as speaking against any mechanism that would hold Property Assessment Services to account for its work. Lord knows they proved in 2017 that a lack of proper oversight can have disastrous consequences).
Assessments must be able to stand up to scrutiny at every level, both internally and externally. However, for too long, the tax agent tail has been wagging the assessment dog and this, in conjunction with chronic understaffing relative to the amount of Requests for Assessment Review that SNB receives, does absolutely nothing to enhance the assessment and taxation system in NB.
Overall, tax agents should of course continue to have a role in the assessment process, but decision-makers need to reconsider the limits of that participation in light of the net negative effect that the agents have on the overall system as it is currently structured.
We need to call out the tax agents on their dubious claim that they are the great defenders of the “beleaguered little taxpayer” or that what they are currently doing somehow serves the overall public good with no collateral damage, especially to residential taxpayers.
Residential property owners are picking up more and more of the tax burden in New Brunswick as time goes on and there’s no evidence that non-residential property owners, whom the tax agents represent, would want to see this changed.
Yet, for the system to be more equitable, it certainly must. And having a clear understanding of the role that tax agents play in the imbalance between residential and non-residential assessment and taxation will help us understand the road to how it could do just that.
This piece was first published in the Northumberland Free Press, 2025-02-15
Excerpt from TAXING NEW BRUNSWICK
Other articles on assessment & taxation
(most recent article first)
Residential vs. Non-residential tax rates: The forced link between the two is costing you money
Municipal budgets: About those ‘tax rate cuts”…
The ‘Spike Protection Mechanism (SPM) does property owners no big favour
Your Property Assessment Notice is here – now what?
New property assessment valuation date in 2025 – how does this affect you?
A TAXING NEW BRUNSWICK Christmas wish list
Property assessment and taxation reform: the Real Property Tax Act
Why “lowered tax rate” isn’t the right headline
Property assessment and taxation reform: the Assessment Act
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Malign design: Nine ways to build a broken property tax system