Nova Scotia’s Prime Minister Tim Houston announced changes to a controversial new non-residential property tax plan during a speech in Halifax on Tuesday.
The tax of $ 2 to $ 100 of the appraised value for non-residents was announced in the spring budget, along with the transfer tax of 5% for non-residents who buy property.
The province said the proceeds from the new taxes will be used to tackle the housing crisis, but the property tax measure is facing a backlash from seasonal residents who own villas or other properties in Nova Scotia.
The transfer of the act will not be changed, but the property tax will now be stepped to soften the impact of the new measure, which was expected to raise $ 65 million in new revenue for the province.
The changes will lead to the release of active members of the Canadian Armed Forces and the introduction of a multi-level tax regime based on property valuation.
According to the province, the changes will benefit owners of smaller properties such as villas. Like income taxes, property values will be taxed at different rates.
- Properties valued at $ 150,000 or less will be exempt from the tax.
- Properties worth more than this will pay 0.5% of the appraised value between $ 150,000 and $ 250,000
- Any additional property values over $ 250,000 will be subject to an initial tax of two percent
- All vacant residential land owned by non-residents will be taxed at two percent, regardless of the estimated value.
These changes will mean $ 42 million to meet the province’s original revenue target, reducing the expected amount of new revenue to $ 23 million instead of the $ 65 million budgeted, according to Nova Scotia’s finance department.
Speaking to the Halifax Chamber of Commerce on Tuesday about the state of the province, Houston suggested that the initial tax plan had been drawn up hastily.
“We are working hard to make a real difference for the people of Nova Scotia and as a government we are moving quite fast,” Houston said. “But when you’re moving fast, sometimes you have to pause and adjust the course.
“We are not so arrogant that we cannot admit when we have to adapt.
Many seasonal Nova Scotia residents have opposed a new property tax for non-residents. (Stu Mills / CBC)
Houston said the change was a better balance and the adjustments were “more than fair”. He said he hoped the seasonal residents “would see that our province is really worth it”.
“We are in a position to grow in every region, but we need housing,” Houston said. “This is one of the ways our government is dealing with the housing crisis, and these changes are responding to the concerns we have heard from New Scots.”
The tax is wrong, Rankin says
Liberal leader Ian Rankin, who attended the event, said that while he was pleased with the change, tax policy remained wrong.
“It’s bad politics, but at least they’re showing that they’re listening to people and their fears,” Rankin said. “We are happy to see this, but the money must go to the municipalities.
“The province should not enter municipal jurisdiction.
Several municipalities have expressed concerns about the tax on non-residents.
Vernon Pitts, the governor of Guysboro, wrote a letter to the prime minister in April asking him to overturn the decision and consult with municipalities on the housing crisis.
Some companies have also indicated that they are reviewing their provincial development plans in light of the new tax.
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