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Nova Scotia scales back non resident property tax after criticism it was ‘unfair’

Click to play video: 'Nova Scotia eases impact of non-resident property tax amid backlash' Nova Scotia eases impact of non-resident property tax amid backlash
WATCH: The Nova Scotia government is easing the rules around its new non-resident property tax. Now, smaller properties -- such as cottages under $150,000 -- will be exempt. After that, a tiered tax up to two per cent will be applied. Global's Callum Smith was at Premier Tim Houston's ‘State of the Province’ address, where the changes were announced. – May 3, 2022

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.

Read more: New non resident property taxes in Nova Scotia forcing tough decisions on homeowners

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.

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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.”

Click to play video: 'Local sociologist has mixed feelings about Nova Scotia’s new tax on out-of-province homeowners' Local sociologist has mixed feelings about Nova Scotia’s new tax on out-of-province homeowners
Local sociologist has mixed feelings about Nova Scotia’s new tax on out-of-province homeowners – Apr 20, 2022

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.

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

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.

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“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.

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