COVID-19 has spurred home sales in Queens. Photo: Ed Halverson

New taxes targeting non-resident homeowners won’t address the affordable housing issue according to a local realtor.

Measures announced in last week’s provincial budget will impose a five percent deed transfer tax on the sale price of a home and a provincial tax of $2 per $100 of a home’s assessed value for anyone from outside the province purchasing a house in Nova Scotia.

Kristopher Snarby, managing associate broker with Exit Interlake Realty says everyone knows a lack of available housing has caused prices in the purchase and rental markets to soar but taxing buyers from outside the province won’t solve the issue.

“These new rules are only applying to people who don’t live here full time,” said Snarby. “For example, for me in the past year, I’ve dealt with a lot of Ontario buyers and Western Canadian buyers but they’re all moving here full time so nothing’s going to change on that front.”

Kristopher Snarby, managing associate broker EXIT Interlake
Realty in Liverpool/Bridgewater. Photo submitted by Kristopher Snarby

Another issue Snarby sees is the homes that would be subject to the tax aren’t generally in the price range for first-time homebuyers.

“It’s not the bread and butter. It’s not the $100,000 homes or the $200,000 homes. Probably a lot of them are oceanfront, lakefront, really high-end homes that are in the half million to a million-dollar range, and in Halifax even more, maybe. So, that’s the other part of the puzzle is that it’s not really the houses that the general public can afford.”

Snarby says many of the non-resident homeowners have come to the area year after year, supporting local businesses and services and have become part of the fabric of the community.

“My fear is we’re upsetting a lot of people who have contributed a lot to the province over the years and kind of slamming the door in their face saying, hey, you’re not welcome here anymore,” said Snarby.

Province says measuring effect of taxes will take years

Finance Minister Allan MacMaster says taxing non-residents will make more housing available in Nova Scotia because it attacks the problem on a couple of fronts.

First, the tax will raise money that government can put into affordable housing and second, it should cool demand for houses from buyers outside the province.

“It’s an inexact science. I will not come on and make claims that this will solve everything, these taxes will solve everything. But we do believe that they will have some impact and over the next two years we’ll be building a database,” said MacMaster. “We’ll know just how much we’ll be raising in terms of revenue, and we’ll know just how much of an impact these taxes will have on the housing market and whether or not they do, in fact, increase supply for Nova Scotians.”

Despite announcing the taxes to tackle the housing crisis, MacMaster says money collected won’t be set aside, instead, it will go into the provincial government’s general revenue.

“We haven’t collected a cent of these taxes to date, but we’ve already spent money last fall. We ear-marked $35 million for affordable housing, we added another $15 million in the budget that was introduced a week or so ago,” said MacMaster. “We’re taking in money and there’s money going out the door all the time and practically speaking, sometimes it’s difficult to just say, okay, we’re going to use these funds for a certain purpose.”

MacMaster says government will continue to look for ways to help Nova Scotians into homes but is definite on one thing.

“We need more housing. Whether it’s government purchased and managed housing, whether it’s co-operative housing or whether it’s private sector.”

MacMaster acknowledges building up the housing stock will take time and in the interim, government will make more rent supplements available to get people into rental units that may be outside their budget.

The new tax measures went into effect April 1.

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Finance Minister Allan MacMaster stands to present the 2022-23 budget in the Nova Scotia Legislature March 29, 2022. Photo Communications Nova Scotia

An additional $413 million in health care spending will help push the provincial deficit to $506 million this year.

The first full budget released by the PCs since winning government last August focused on delivering on some of the promises made during that campaign.

The top priority identified in Tuesday’s budget is addressing the province’s ailing healthcare system.

Nova Scotia will spend $5.7 billion on health care this year, which accounts for 43 percent of the total $13.2 billion budget

Some of that money will make virtual care available to people waiting for a family doctor, extend operating room times to help clear a backlog of surgeries, create 200 new nursing seats at NSCC, and help recruits new medical professionals to the province.

Nova Scotia is also spending to improve long-term care.

Government has allocated $66 million for continuing care assistants to ensure they are the highest paid in Atlantic Canada.

Money is also being spent to recruit train and keep CCAs and keep seniors in their own homes longer.

A lack of housing has been identified as a major issue in Nova Scotia.

Government is attempting to keep housing stock in the hands of Nova Scotians with the addition of a five percent deed transfer tax for non-residents and a property tax of $2 per $100 of assessed value on buildings with three or less units owned by non-residents.

Finance Minister Allan MacMaster says the new measures accomplish a couple of goals.

“It will be a significant revenue generator and it’s going to take us as a couple of years to build a proper database to determine who actually is non-resident. We certainly have sources of information, but a database will be built over a couple of years,” said MacMaster. “For some it may result in properties becoming available to Nova Scotians who are struggling to find them right now.”

MacMaster says government is investing in Nova Scotia now but don’t expect to see a pattern of unchecked spending.

“This first budget, our focus is on fixing healthcare and our focus is investment in a province that’s growing,” said MacMaster. “In the future, I think what I would say to people who might be concerned about the degree of spending in this budget is that we are showing a track back towards reduced deficits going forward.”

E-mail: edhalversonnews@gmail.com
Twitter: @edwardhalverson

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