Nova Scotia realtors question whether tax on non-residents will ease housing shortage

Non-residents who buy a property and do not move to the province within six months of the closing date have to pay a transfer tax of five per cent of the property's value.

New tax measures aimed at non-resident property owners announced in Tuesday’s Nova Scotia budget are sending the wrong message, realtors in the province say.

As of Friday, non-residents who buy a property and do not move to the province within six months of the closing date have to pay a transfer tax of five per cent of the property’s value. The province will also levy a property tax of $2 per $100 of assessed value of residential properties owned by non-residents, though this won’t apply to buildings with more than three units or those rented to Nova Scotians year-round.

John MacKay, owner of MacKay Real Estate in Wolfville, N.S., said he thinks the messaging to out-of-province buyers is wrong, especially considering it wasn’t long ago that the province was “desperate” to attract people, and the last two years have seen a surge in interest in Nova Scotia properties.

“It’s sort of upsetting to see the government really trying to pour cold water on all the progress that it’s made to encourage people to come to Nova Scotia,” MacKay said in an interview Friday.

“I think Nova Scotia is in a very, very fortunate spot now where we’re actually seeing some real interest and desire to be here, so how do we handle it?”

Finance Minister Allan MacMaster said Tuesday the taxes will bring in $81 million in the coming fiscal year and help make housing more available to Nova Scotians.

“It’s incredibly difficult to find housing, whether it’s affordable housing or even attainable housing — so we’re hopeful this measure will help people who are struggling to find a place to live,” MacMaster said.

Currently, there are about 27,000 properties in Nova Scotia owned by non-residents — more than half of them from Ontario — according to the province. Data from the Canada Mortgage and Housing Corporation offers a glimpse of the scarcity of housing, as vacancy rates in Halifax’s residential buildings fell to one per cent in October 2021.