Nova Scotia Backpedals On Non-Resident Property Tax
HALIFAX—The government of Nova Scotia has axed a plan to charge an extra tax to non-residents who buy homes in the province.
Premier Tim Houston made the announcement on May 5, just two days after he defended the tax at the annual State of the Province Address.
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Speaking to reporters on Thursday, Houston said his government is making the change to protect Nova Scotia’s reputation as a welcoming province.
“The reputation of our province is more important than any policy and it’s certainly more important than my personal pride. Nova Scotia is a welcoming province and I want that to be loud and clear,” Houston said.
The Non-Resident Property Tax was first revealed in the provincial budget on March 29 as part of a package of new taxes on non-resident property owners. The plan was to levy an extra tax on people who own property in Nova Scotia but don’t live in the province full-time.
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The tax would have affected about seven percent of properties in the province and cost about $8,500 a year for an average Nova Scotia home.
The province billed the tax as one more tool in its toolbox to help increase housing availability. However, criticism started pouring in almost as soon as the province revealed its plan.
Non-resident property owners, including many with summer cottages in the province, complained that they felt personally targeted by the measures. National media also took notice of the plan and started asking if Nova Scotia was signaling outsiders to stay away.
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At his May 3 State of the Province Address, Houston announced changes to the tax meant to address some of those concerns.
However, the premier defended the premise behind the tax, saying the government wants permanent Nova Scotian residents to be able to afford 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 said on May 3.
However, by May 5 Houston’s priorities appeared to have changed. He said he now believes “the risk of reputational damage to Nova Scotia is becoming more real” and that he’s “not willing to accept” that.
Reporters pressed Houston on why his government didn’t better anticipate the largely negative response to the plan.
Houston said the province is “always running a number of analyses on every policy decision” it makes but that it didn’t anticipate how strongly the public would react.
“We did not foresee that this would change the view of Nova Scotia in the eyes of people,” he said.
Now that it is backpedaling on the Non-Resident Property Tax, Houston said the government will have to look for another tool to address the housing affordability crisis.
It will also have to find a way to deal with a significant hole in its budget.
The government will still make some money from the Non-Resident Deed Transfer Tax that was announced alongside the Non-Resident Property Tax. However, it projected the property tax would bring in $65.5-million.
Houston had no concrete plans for recouping those losses.
“We have a $500-million deficit to begin with, so we have a lot of work to do to build the economy of this province. And we will continue to look for ways to support Nova Scotians, to protect Nova Scotians,” he said.
Trevor Nichols is the associate editor of Huddle, based in Halifax. Send him your feedback and story ideas: [email protected].