Nova Scotia scales back non-resident property tax after criticism it was 'unfair'

Nova Scotia Premier Tim Houston fields a question at a meeting of the Council of Atlantic Premiers in Halifax on Monday, March 21, 2022. (THE CANADIAN PRESS/Andrew Vaughan)

The Nova Scotia government is revising a contentious non-resident property tax that was adopted last month as a way to ease the province's housing crunch.

In a news release, Premier Tim Houston says the non-resident owners of properties such as small cottages will be exempted from the tax on the first $150,000 of the home's municipal assessment.

The premier says a 0.5 per cent tax will apply on the tranche of value between $150,000 and $250,000, adding that the tax will rise to two per cent of a property's value above $250,000.

Houston says active members of the Canadian Armed Forces will be exempt from paying the annual tax, as part of changes included in regulations to be released this spring.

The non-resident tax adopted last month in the recent provincial budget required non-resident property owners to pay $2 per $100 of assessed value of their residential properties.

Houston's government introduced the tax as a way to encourage non-residents to sell their properties to locals, but the measure drew fire from dozens of owners who testified in public hearings held last month that it was "unfair and discriminatory."

A second tax, also included in the budget, forces non-residents who buy property and do not move to the province within six months of the closing date to pay a transfer tax of five per cent of the property's value.

Houston said that although Nova Scotia "loves our seasonal residents," the intent of the tax is to assist people who live in the province year-round and can't afford a place to live.

"We are positioned to grow in every region, but we need housing," Houston said in the news release. "This is one way our government is addressing the housing crisis and these changes respond to concerns we have heard from Nova Scotians."

However, Finance Minister Allan MacMaster has admitted that it won't be known if the taxes will help tackle the housing problem until they are implemented.

MacMaster said Tuesday the changes are in response to some of the concerns that were raised through the legislative process.

"We are listening to the feedback we have received and believe that these changes reflect some of the concerns raised by non-resident property owners," MacMaster said in the news release. "We expect regulations to be finalized this spring."

Houston announced the changes during a speech before the Halifax Chamber of Commerce on Tuesday.

This report by The Canadian Press was first published May 3, 2022.