NS New Non-Resident Deed Transfer & Property Taxes

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It was revealed on March 29, 2022, the province of Nova Scotia instated two new taxes for non-residents concerning their properties. Many believe that this is the government’s attempt to cool the Halifax Real Estate Market. The response amongst the public has been very divided. It seems to have caused some hope in buyers who have been struggling to secure homes and caused frustration in property owners who although may not be permanent residents, call our province home through various parts of the year. Either way, these taxes have been implemented, effective April 1, 2022. We decided to create an article to break down the new changes and make sense of them for our readers.

 

Provincial Deed Transfer Tax for Non-residents

 

The provincial deed transfer tax for non-residents is a new tax (5% of the purchase price or assessed value) that is charged to non-residents upon the purchase of a property in Nova Scotia. Some key points to be aware of:

 

  • This tax will be implemented on any purchases after April 1, 2022
  • This tax is added to the current municipal deed transfer tax. For example, in Halifax, the municipal deed transfer tax 1.5%. This means that if this new provincial tax applies to you, and you are purchasing in Halifax, you will be paying a total of 6.5% deed transfer tax upon closing.
  • The tax will be calculated on the purchase price or the assessed value, whichever is greater.
  • This new tax applies to residential properties with 3 or fewer dwellings.

 

The exemptions to the Provincial Deed Transfer Tax are as follows:

 

  • First and foremost, you are exempted if you are a resident of Nova Scotia
  • If your agreement of purchase and sale was signed before April 1, 2022
  • If 50% or more of the owners are residents of Nova Scotia
  • If you intend to move into the residence within 6 months of purchasing
  • The residence is being transferred to you under a power of sale
  • The residence is being transferred due to foreclosure
  • The residence is purely commercial
  • The residence will be registered to a Canadian Charitable organization

 

There are a few other exceptions that you can read more about here.

 

To view the required forms and process, visit the government’s website here

 

Provincial Property Tax for Non-residents

 

The provincial property tax for non-residents is a new annual property tax that must be paid by non-residents on top of the already existing municipal taxes. This tax will have a rate of $2.00 per $100.00 of the property’s assessed value. Some things you should know:

 

  • This tax will be implemented on any purchases after April 1, 2022
  • Non-residents will be responsible for both the already existing municipal property taxes and this new provincial property tax.
  • This new tax applies to residential properties with 3 or fewer dwellings.

 

The exemptions to the Provincial Property Tax are as follows:

 

  • First and foremost, you are exempted if you are a resident of Nova Scotia
  • If your agreement of purchase and sale was signed before April 1, 2022
  • If 50% or more of the owners are residents of Nova Scotia
  • If the residence is rented out for at least 12 consecutive months.
  • The residence is purely commercial

 

The Government has stated that required forms and more information will be available in the near future.

 

For any questions regarding these new taxes, you can contact us at either 902-488-0012, info@andrewperkins.co, contact NSPropertyTax@novascotia.ca, or click here.