Nova Scotia to hike taxes, fines for short-term rental operators

Nova Scotia is changing the rules for short-term rentals, including by hiking the tax applied when operators register.

The tax will vary depending on location, ranging from $240 in rural areas up to $3,600 in the Halifax core. Homeowners renting space inside their primary residence will be charged $10.

The government framed the announcement as a step toward relieving the housing crisis. But Housing Minister John Lohr conceded the number of units that will be converted from short-term rental to long-term housing is likely low.

"We recognize that it won't be many, but I will say every unit counts," Lohr told reporters Thursday.

Short-term rental operators are already expected to register with, and pay a fee to the province. But since those rules came into effect three years ago, no one has been penalized for breaking the rules, making registration "essentially voluntary," said Lohr.

Rules to take effect next spring

The new rules will be introduced at Province House during the fall sitting of the legislature. Details will be finalized in regulations, including what the penalties will be for failing to register, and will come into effect starting next April.

Both operators and the platforms that list them will be held responsible. Operators will be fined for failing to register, and websites including Airbnb, VRBO, Expedia and Booking.com will face fines if they list operators that aren't registered.

Department officials said they are already working with those platforms to prevent unregistered operators from listing their rentals, but no one is being fined for failing to comply.

Lohr said the tax will be highest in the centre of Halifax because that's where the housing shortage is the most severe, and it's where the province has the greatest concentration of short-term rentals.

Rentals inside a primary residence will face the lowest registration fee because the province does not want to disincentivize that practice, said Lohr. Those operators could face the same fines as any other for failing to register, however, because the province wants to have a complete registry.

"One of the purposes of this is to simply to get the registrations … one of the purposes is to get a handle on the entire market," said Lohr.

'Lipstick on a pig'

Opposition leaders were unimpressed with the government's plan.

"I think this is just trying to put lipstick on a pig, really," said Liberal leader Zach Churchill.

"The government does not have a housing plan. so they are trying to come up with ill-thought-out announcements … to pretend that they do. And we're not going to see this housing situation dealt with, if that's going to be the strategy moving forward."

NDP leader Claudia Chender was similarly skeptical.

"This is a government grasping at straws in the absence of a long-promised housing plan and in the face of a massive, massive shortfall in housing," said Chender.

"My takeaway is it's probably not going to make that big of a difference."