CANADA, February 1 - The Government of Prince Edward Island is delivering a property tax initiative that will provide a one-time subsidy to offset the 2023 property tax increase and further support Islanders with the cost of living.  

Similar to the 2022 property tax initiative, the 2023 Property Tax Subsidy will be administered through the Provincial Taxation Office and will provide a subsidy to owner-occupied residential properties across PEI that will offset increases to provincial taxes payable. 

“As we continue to feel the effects of market and inflationary pressures, it is important that we keep more money in the hands of Islanders so that our local communities and economies can be supported. Our Government has been committed to supporting Islanders through PEI-made solutions, and this initiative is an example of how we can continue to work together to emerge from yet another challenging time and strengthen our Provincial economy.”

- Finance Minister Mark McLane

Due to inflationary pressures still affecting global and local housing markets, 2023 property tax assessments on owner-occupied properties were anticipated to increase five percent through the Real Property Assessment Act. A similar subsidy was provided in 2022 to prevent an increase at that time. In order to ensure that Islanders are guarded from short-term sharp increases in taxation, qualified households may receive subsidy of up to 10 percent this year to keep their taxes payable at 2021 levels.

The 2023 Property Tax Subsidy will be applied to owner-occupied properties and does not apply to municipal taxes, or fire dues.

Islanders are reminded that property tax assessments for the 2023 tax year will be mailed out on May 5, 2023. If a property tax assessment is not received, please visit the Provincial Taxation Office located on the 1st Floor of the Shaw Building at 95 Rochford Street or call 902-368-4070.

Media contact:    
Kip Ready
Department of Finance
kjready@gov.pe.ca

Backgrounder:

Under the Real Property Assessment Act, all real property is to be assessed at its market value. Annual market value assessment increases are based on property sales data. The PEI Real Estate Association has reported that the annual average price of homes in PEI increased by 14.6 percent from October 2021 to October 2022.

In order to ensure that properties are safeguarded from sharp increases in market or inflationary values, the owner-occupied residential program provides protection from increases in market value in excess of inflation. Increases in the taxable assessment value for residential properties that are owner-occupied are capped at the lower of the Consumer Price Index (CPI) and five percent. When ownership of a property changes, the taxable value is reset to the market value.

During 2022, a one-time subsidy was applied to owner-occupied residential property accounts to effectively freeze taxes payable at the same rate as 2021. Because the subsidy was applied as a payment and not an assessment freeze, most provincial property tax assessments for 2023 were set to experience another increase of up five percent due to market value increases in excess of inflation.

To ensure that the subsidy reaches those homeowners who have remained in their property and are subject to inflation driven increases in property taxes payable, the subsidy will be applied to properties that were owned on December 31, 2022 and where the ownership has not changed. Properties whose ownership changed during 2022 will only receive a partial subsidy capping their taxes payable at the 2022 assessed amount post-purchase.

Quick Facts:

• The 2023 Property Tax Subsidy will support over 57,000 Island households in property tax relief;
• The 2023 Property Tax Subsidy is an $8 million provincial investment that will directly leave more money in the hands of Islanders during a time of increased cost-of-living;
• The 2023 Property Tax Subsidy will be applied as a payment on account for the qualified homeowners, and will be earned/shown on the May 2023 assessment;
• An insert will be included in the 2023 property tax bills explaining the provincial support for Islanders including frequently asked questions, and contact information.