Property owners: The biggest winners of the drop in school tax, really?

Bill 3, introduced by the Legault government, provides for a leveling down of the school tax at the lowest regional rate currently in effect, which is 10.54 cents per $ 100 of property assessment. While the opposition parties criticize this measure which, according to them, favors the owners at the expense of the tenants, CORPIQ begs to differ.

First of all, this new measure is not accompanied by budget cuts for school boards, as the government will maintain the same funding. It will therefore have to obtain between 700 and 900 million dollars from other sources, the most important being the income tax and the QST. But owners are the ones who contribute the most; they pay more taxes and consume more goods and services. The government is therefore moving school system funding from the tenants, to the property owners, whether they are landlords or not.

Secondly, it would be wrong to claim that all property owners have consistently transferred all school taxes to their tenants. Since real estate is a fragile market when vacancy rates are high, property owners often have no choice but to absorb some of these increases in order to maintain attractive rents, and thus to avoid being left with unoccupied dwellings.

It is therefore logical that, in the same way, the announced tax reduction is partly retained by the owners who have sustained the cost of several years of tax increases related to the property value of the building.

School taxes represent a significant part of the fixation criteria used by the Régie du logement. Reducing these taxes will, mechanically, reduce the rent adjustments that will be fixed in court, having themselves an influence on all rents. That being said, very few property owners will view not reducing their rent as immoral, since the government has, for the last 20 years, forced them to make adjustments to their net income well below inflation.