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A new provincial deed transfer tax and property tax regime for non-residents of Nova Scotia

Brian Tabor, QC and Eyoab Begashaw

Effective April 1, 2022, the Province of Nova Scotia announced that it will be implementing new property taxes impacting non-resident property owners. As a part of the 2022-2023 provincial budget, the Province of Nova Scotia is introducing the Nova Scotia Non-Resident Property Tax and Non-Resident Provincial Deed Transfer Tax.

The province has not provided comprehensive details, but has made the following information available regarding the taxes:

Nova Scotia Non-Resident Property Tax

  • The non-resident property tax will be calculated at $2 per $100 of assessed value and is effective April 1, 2022.
  • If housing owned by a non-resident is rented out for twelve (12) months or longer, then they will not have to pay the tax as they are providing homes for Nova Scotians.
  • If a property has multiple owners, an exemption from this tax is provided if fifty per cent (50%) or more of the owners are residents of Nova Scotia.

Non-Resident Provincial Deed Transfer Tax

  • Residential property purchasers who are non-residents of Nova Scotia will be required to pay a deed transfer tax rate of five per cent (5%).
  • All purchasers of residential properties who are residents of Nova Scotia are exempt from the non-resident deed transfer tax.
  • If a purchaser is planning to move to Nova Scotia to live and buys a home, the purchaser will be exempt from the deed transfer tax – usually within six (6) months.

Key details are yet to be provided leaving many questions regarding the scope of these taxes unanswered. Legislation is expected to be introduced in the Financial Measures Act 2022 (“FMA”) addressing these changes. The FMA should provide further clarity on considerations such as what constitutes a residential property, a resident and a non-resident, and payment, collection and reimbursement mechanisms.

We will provide a follow-up thought leadership piece as details become available.


This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact a member of our Real Property group.

 

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