Nova Scotia to make changes to controversial new non-resident property tax plan

Nova Scotia Premier Tim Houston announced changes to a controversial new non-resident property tax plan during a speech in Halifax on Tuesday.

The tax of $2 per $100 of assessed valuefor non-residents was announced in the spring budget, along with a five per cent deed transfer tax for non-residents who purchase a property.

The province said the revenue from the new taxes would be used to help address the housing crisis, but the property tax measurehas faced backlash from seasonal residents who own cottages or other properties in Nova Scotia.

The deed transfer will not be changed, but the property tax levy will now be tieredto soften the blow of the new measure, which had been expected togarner the province $65 millionin new revenue.

The changes will see an exemption for active members of the Canadian Armed Forces and the introduction of a tiered tax regime based on the property assessment.

According to the province, the changes will benefit the owners of smaller properties like cottages. Similar to income taxes, property values will be taxed at different rates.

• Properties assessed at $150,000 or less will be exempt from the tax.
• Properties worth more than that will pay 0.5 per cent on assessedvalues between $150,000 and $250,000
• Any additional property values over $250,000 will be taxed at the original two per cent levy
• All vacant residential land owned by non-residents will be taxed at two percent regardless of assessed value.

Those changes will mean a $42 million hit to the province's original revenue target, reducing the anticipated new revenue amountto $23 million, instead of the $65 million anticipated in the budget, according toNova Scotia's Finance Department.

During his state-of-the-provincespeech Tuesday to the Halifax Chamber of Commerce, Houston suggested the originaltax plan was drafted in a hurry.

"We're working hard to make real change for Nova Scotians and as the government we're moving pretty fast," said Houston. "But when you move fast sometimes you need to pause and adjust course.

"We are not so arrogant that we can't admit when we need to adjust."

Houston said the change was a better balance, and the adjustments are "more than fair." He said he hopedseasonal residents "will see that our province is truly worth it."

"We are positioned to grow in every region, but we need housing," Houston said."This is one way our government is addressing the housing crisis and these changes respond to concerns we have heard from Nova Scotians."

Tax is flawed, Rankin says

Liberal leader Iain Rankin, who was at the event, said while he was happy with this change, the tax policy remained flawed.

"It is bad policy, but at least they're showing that they're listening to people and their concerns," said Rankin. "We're happy to see that but the money should be going to municipalities.

"The province shouldn't be reaching into municipal jurisdiction."

Several municipalities had raised concerns about the tax on non-residents.

Vernon Pitts, the warden of the Municipality of Guysborough, wrote a letter to the premier in April that asked him to rescind the decision and hold consultations with municipalities on the housing crisis.

Some businesses had also indicated they were reconsidering their development plans for the province in light of the new tax.