A significant tax increase is likely on the way for residents of the Halifax Regional Municipality.

A report from acting chief administrative officer Brad Anguish to the budget committee said property tax bills in the city could see an average increase of 10.5 per cent.

Anguish’s report said the direction from city council in July was to hold overall spending at the same level as 2025-26, allowing only for unavoidable increases like inflation, contractual obligations and mandatory provincial contributions.

“Despite these efforts to control expenditures, rising costs in compensation, reserve replenishment, and previously approved initiatives are projected to require an average property tax bill increase of approximately 10.5 per cent,” Anguish said.

The report indicated an estimated budget increase of $88.9 million will reflect the combined effect of maintaining core services, restoring reserve balances and meeting essential commitments while continuing to seek operational efficiencies and savings.

A staff report delivered July 8 recommended a budget scenario for 2026-27 that would freeze spending and keep things steady in the city.

Anguish’s report said the broader financial pressures and cost drivers coupled with council decisions through the year have shaped the property tax rate increase.

“Two of the most significant contributors have been the financial strategies outlined in the Reserve Funding Strategy report from July 8 concerning municipal reserves, and the approval of the new library lease,” the report stated.

Anguish said the consequence of those decisions has been to elevate the base budget beyond what efficiency measures or spending freezes could have achieved.

He said the property tax bill increase isn’t just because of unavoidable external pressures, but deliberate choices to invest in the city.