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Property Tax Information Requests, Nova Scotia

The Property Valuation Services Corporation (PVSC), formerly the provincial assessment department, is going boldly where it has gone before… demanding that property owners hoist themselves with their own petard. It is doubly ironic that property owners are required to pay for the cost of PVSC by way of a levy on their tax bill… and then are expected to do much of its work for it by downloading, printing and then completing its Income and Expense Questionnaires. While disregarding the request is poor strategy, completing it has its dangers too. PVSC will use the information it gleans from the Questionnaires to assess property for the 2017 taxation year. If your property is currently under-assessed, it is tempting to ignore the request in the hope that this happy circumstance will continue. Unfortunately, failing to file the Questionnaire can send a clear signal to PVSC that you think you are undervalued. Far from keeping you out of sight, it has the opposite effect. And it gets worse. In the absence of a completed Questionnaire, PVSC will use its own data, unimpeded by your property’s factual income and expenses, to calculate its assessment… and you will be left without recourse, as the penalty for failure to comply with the request will be loss of 2017 appeal rights. We recommend therefore that you complete and file the Questionnaire, but with your audience in mind. Comfortably cushioned from the vicissitudes of tenant selection, rental negotiation and collection, and things that burst in the night, PVSC will happily accept at face value your rental income, unless it appears to be too low… and gaily disregard expenses they consider to be above the norm. Do not expect them to empathise with your sweat and tears, services you undertake yourself to minimise costs, unless you monetise them. Nor should you expect increased maintenance costs – inherent, for example, in a single bedroom apartment building with a transient population – to strike an echoing chord. Expect PVSC to discount these as “outliers,” or your management and administration costs as “excessive,” unless you explain the nuances of revolving doors and are prepared to supply provenance. Tenant inducements and management efforts to maintain occupancy are concepts unfamiliar to the cozy world of PVSC. You will have to quantify them. If your building contains office, retail or industrial tenancies, be careful how you describe your leases; the subtleties of “net” versus “gross” lease terms may not be fully understood by PVSC.

Further complicating this year’s round of requests is the fact that it is being made almost a full fiscal quarter earlier than is customary. For 2016, and for the recent past, assessments reflect a property’s market value as of a date two years in the past (called the base date). In an effort to produce assessments that are more current, PVSC is shifting the base date to reflect market values one year in the past. This means that assessments provided to property owners in January 2017 will reflect a property’s market value as of January 1, 2016. With this shift comes a requirement to analyse income and expense information earlier in the year…so early, in fact, that owners with December year-ends may not yet have 2015 statements completed. Any owner in that predicament should provide the most recently-available information, because the PVSC has no legislative authority to extend the 30-day deadline.

The Bottom Line: Download the appropriate Questionnaire from the PVSC’s website at Complete it with caution; your responses may be misinterpreted. Return it to PVSC by 17th March.

Action Required: If your property is enrolled in our PAMS™ Property Tax Manager program, let us review your completed Questionnaire before you return it to PVSC. Our Lead Consultant assigned to protect your property will be pleased to provide you with assistance in completing the Questionnaire. If you are not yet a PAMS™ client, and would like assistance in completing the Questionnaire, please call our Nova Scotia Tax Team, Giselle Kakamousias, Mark Turner, or Greg Kerry at 1-800-567-3033 (902-429-1811 in HRM).

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