How will the Non-Resident Tax Affect Homeownership Costs in Nova Scotia?

Last week, the Provincial Government released a budget that included newly created Deed Transfer Taxes for Non-residents and increased Property Taxes for Non-residents. Since this was announced, many people have had questions of how this will affect them as well as the real estate market in Nova Scotia. See below for more information quoted from the Province of Nova Scotia website:

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Provincial Deed Transfer Tax for Non-residents

The Provincial Deed Transfer Tax (PDTT) will be effective for all purchase and sale agreements and other specific transfers starting 1 April 2022.

The Provincial Deed Transfer Tax will apply to all residential properties or portion of property deemed residential with 3 dwelling units or less, including vacant residential property. 

The PDTT is a 5% tax levied on the purchase price or the assessed value of property (whichever is greater).

Exemptions

Some deed transfers are exempt from this tax. They include:

  • transactions involving an Agreement of Purchase and Sale dated before 1 April 2022
  • transactions only including residential property (or a portion of residential property) with more than 3 dwelling units
  • residential property with 3 or less dwelling units being transferred to grantees where 50% or more of the ownership is by residents of Nova Scotia
  • residential property with 3 or less dwelling units being transferred to grantees who are not residents of Nova Scotia, if they intend to move to Nova Scotia within 6 months of the property transfer
  • property being transferred between spouses/common law partners (or former spouses or common law partners if the transfer is for the purpose of division of marital/jointly held assets)
  • all of the statements in this bullet must be true for this exemption to qualify. Deeds being registered to simply confirm, correct, modify, or supplement a deed previously given, if there is no consideration beyond $1 and the deed does not include more property than the previous deed
  • residential property being transferred under a power of sale
  • residential property being transferred by foreclosure (including a sale under an order for foreclosure and sale, a sale under an order for simple foreclosure, or a transfer effecting foreclosure under another court order)
  • transactions only including property classified as commercial/resource (no portion of the property is classified as residential)
  • transactions where the grantee is a registered Canadian charitable organization and the residential property in this transaction will not be used for commercial, industrial or other business purposes

For property transactions where the Provincial Deed Transfer Tax applies, an affidavit is required with additional information about each grantee. The affidavits for each grantee must be uploaded online when prompted.

Process

More information and required forms will be available in the near future. Please check this website for updates.

Provincial Property Tax for Non-residents

The Provincial Property Tax for Non-residents applies to residential property with 3 dwelling units or less (including residential vacant land) or a portion of property that is residential, if the majority is owned by non-residents of Nova Scotia. The Provincial Property Tax for Non-residents is effective 1 April 2022.

The Provincial Property Tax for Non-residents is an annual tax of $2 per $100 of the property’s assessed value, as determined by the Property Valuation Services Corporation.

Exemptions

Some properties are exempt from Provincial Property Tax for Non-residents. Exemptions include:

  • residential property with more than 3 dwelling units
  • residential property with 3 or less dwelling units where 50% or more of the ownership is by residents of Nova Scotia
  • residential property with 3 or less dwelling units where over 50% of the ownership is by non-residents of Nova Scotia and rented out on a full-time basis (leased for at least 12 months)
  • property classified as commercial/resource (no portion of the property is classified as residential)

Process

More information and required forms will be available in the near future. Please check this website for updates.

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Contact

For questions about the Provincial Deed Transfer Tax for Non-residents, or the Property Tax for Non-residents.

Reach out to a HaliPad Consultant with any questions on the new Non-Resident Taxes.

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