N.S. Premier Announces Changes To Non-Resident Property Tax
HALIFAX – During his State of The Province Event in Halifax, Premier Tim Houston revealed that his government is going to make amendments to the new non-resident property tax.
The controversial tax was introduced only in March and is aimed at seasonal residents of Nova Scotia. It introduced a yearly charge of two per cent of the value of any residential property owned by a non-resident.
Premier Tim Houston has maintained that the goal of the tax isn’t to fill the treasury but to increase the housing supply for those who reside in the province year-round.
The province says about 27,000 properties in Nova Scotia (about 6.7 per cent) are owned by people with mailing addresses outside the province.
But during his speech at the State of The Province luncheon, hosted by the Halifax Chamber of Commerce on Tuesday, Houston said, after receiving a lot of feedback, he realized the new tax could be fairer.
“When you move fast, sometimes you need to pause…” Said Houston.
The biggest change comes in the form of an exemption for the first $150,000 of a property’s assessed value. Houston said at the luncheon that this was to protect the family cottage.
“We looked at the average home sale, we looked at what’s happening with assessments and figured that was a reasonable amount.”
“Obviously, we want to protect the family cottage.”
The tax also moves up progressively now after the changes. Instead of a hard 2 per cent tax, it starts at 0.5 per cent for values $150,000- $250,000, and the two per cent kicks in for anything assessed higher.
“All vacant residential land owned by non-residents will be taxed at two per cent regardless of the assessed value,” stated a government press release on the matter.
Active members of the Canadian Armed Forces will be exempt from paying this new tax altogether.
But the PC government is not budging on the new deed transfer tax, which is a five percent tax on the value of property bought by a non-resident.
According to the Nova Scotia Association of Realtors, the average home in the province sold for $422,100 in February. So, under the new tax, a non-resident would face an additional, one-time payment of more than $21,000.
With the new changes, the government says it’s taking a big cut in the money they expected to generate from the new taxes: from $80-million down to $23-million.
During his speech, Houston defended the premise behind the new taxes, saying he and his government want permanent Nova Scotian residents to be able to afford a home.
The Premier used the example of a young pharmacist he recently met on the South Shore who was already thinking of moving because he couldn’t find a home he could afford.
“We have to help those who are trying to and choose to make their home right here, because they’re finding it hard to make a home.”
“I love our summer residents, I love our tourists, but I really love our full-time residents. People who love to make Nova Scotia their home.”
Houston also alluded to the idea of tax fairness in his speech, noting that a seasonal NS resident from Ontario wouldn’t be contributing income tax to the province.
“Stop and think about that. Someone who spends months of the year in Nova Scotia but pays zero income tax in Nova Scotia; 100 per cent of their income tax is in Ontario.”
With files from Trevor Nichols.