By Andrew Macdonald
Nova Scotia’s Progressive Conservative government is doubling the deed transfer tax on come-from-away (CFA) property purchases, effective April 1.
The move is highly controversial, and realtors and brokers have been urging Premier Tim Houston to scrap the tax.
On top of a provincial deed transfer tax, buyers in Halifax already pay a municipal government tax of 1.5 per cent.
Duckworth Real Estate broker Piers Baker has written the premier, saying the CFA tax is ‘un-Canadian’.
Following is Baker’s letter to Premier Houston.
Regarding your proposed Provincial Deed Transfer Tax, please consider how detrimental this would be to Nova Scotia.
In order of priority;
1. Your timing is all wrong. In a time when inter-provincial cooperation should be at the forefront, with Canada under threat from the U.S., the PDTT should be reduced to zero.
2. Closing the provincial border to fellow Canadians who want to buy here is totally un-Canadian and counterproductive.
3. Implemented with neither consultation nor economic analysis, such a move would undermine economic growth.
4. It would particularly harm rural communities that rely on tourism and its resulting momentum: people who have moved here or moved back home to retire part-time. Out of province buyers propel rural economies with their money going towards construction, home maintenance, landscaping, restaurants, yacht clubs, golf clubs, art galleries and such. They are culturally involved, which is a major driver for the cultural economy. Many of the businesses in this space are barely surviving as it is.
5. Seasonal out-of-province owners don’t draw from either our provincial education or health care, but still pay municipal taxes, often higher than full-time residents.
6. This tax promotes non-diversity, creating an ethnically stale population. New ideas from other parts of Canada and the world at large make societies thrive. The creative class was effectively shut out when the film tax credit was eliminated. This is a similarly backwards move.
7. There are plenty of places in Canada where buyers can purchase vacation homes which don’t have the exorbitant tax. Those communities will thrive at our expense while Nova Scotia stagnates.
8. The argument that this will help the housing crisis is ill-founded and misguided. Affordable homes in Nova Scotia are at the 500K or lower range, whereas out-of-province seasonal waterfront homes fetch millions. Affordable living should be promoted in urban areas where there is employment. Seasonal out-of-province buyers are purchasing in rural oceanfront areas.
9. If the idea was to use the funds to build affordable housing, the increase from 6.5 per cent PDTT to 11.5 per cent PDTT will not increase the number, it will shut down out-of-province sales resulting in even less tax collection. It is far too high a penalty.
10. The value of rural vacation properties will drop because of the tax. This means lower assessments and lower rural municipal tax collection in turn, a drop that will have no correlation whatever with the HRM housing crisis.
In a nutshell, this is an awful idea in terms of promoting economic growth and should be cancelled outright.
Real estate broker Piers Baker at the popular Kiwi Cafe in Chester village. Look at Baker’s hat: Canada is not for sale.
