New Brunswick Introduces Lower Personal Income Tax Rate; Accelerates Property Tax Rate Reductions Implementation

There is some good news for all New Brunswick tax residents.

The provincial government has announced two tax-related legislations today — legislative amendments to the New Brunswick Income Tax Act that would reduce provincial personal income taxes and acceleration of the implementation of the provincial property tax rate reductions.

Reduction of provincial personal income taxes

New Brunswick says legislative amendments to the New Brunswick Income Tax Act will reduce provincial personal income taxes starting the year 2024 (the taxation year of 2023).

The following provincial personal income tax rate reductions will apply for 2023 and subsequent taxation years:

• Tax rate on the second income bracket – reduced from 14.82 per cent to 14 per cent.
• Tax rate on the third income bracket – reduced from 16.52 per cent to 16 per cent.
• Eliminating the fourth income bracket and taxing this group at the same rate as the third income bracket – from 17.84 per cent to 16 per cent.
• Tax rate on highest income bracket – reduced from 20.3 per cent to 19.5 per cent.

 

These reductions are in addition to the previously announced increase of basic personal amount to $11,720 from $10,817, and increasing the low-income tax reduction threshold to $19,177 from $18,268.

The government says the average benefit for a taxpayer from these reductions is estimated to be about $310.

Property tax rate reductions:

The provincial government is bringing forward the date of implementation of the provincial property tax rate reductions to the taxation year 2023 from the year 2024.

The provincial property tax rates for the 2023 taxation year are as follows:

• Non-owner-occupied residential properties – $0.5617/$100 of assessment, for a total provincial rate reduction of 50 per cent since 2021
• Other residential properties – $1.0345/$100 of assessment, for a total provincial rate reduction of 15 per cent since 2021
• Non-residential properties – $1.8560/$100 of assessment, for a total provincial rate reduction of 15 pour cent since 2021.

New Brunswick says an estimated 44,000 residential rental properties and more than 24,000 non-residential properties will benefit from these changes.

As per the news release, the acceleration of property tax rate reductions will have an estimated additional revenue impact of $28 million in 2023-24, based on estimates in the 2022-23 budget.

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