New N.S. property taxes for non-residents aimed to cool housing market, says finance minister

Finance Minister Allan MacMaster acknowledges there are unknowns tied to new taxes for non-residents who own property in Nova Scotia, but action is required in the face of unprecedented housing demand and limited supply, he says.

"Our focus with this legislation has really been on the fact that so many Nova Scotians are struggling to find housing," he told reporters on Friday.

"If people don't have a place to live and can't find a place to live, it's holding back our economy."

MacMaster spoke after the tabling of the Finance Measures Act, the document that puts into action the finance matters included in the provincial budget.

New property and deed transfer taxes

The new deed transfer tax and property tax, which is expected to apply to about 27,000 properties and generate about $81 million this fiscal year, comes at a time when housing prices are skyrocketing and the province's population is at an all-time high.

The new taxes do not apply to non-residents who intend to move here within six months, properties that are rented to Nova Scotia residents, or properties owned by multiple people and more than half of those owners are residents.

The minister acknowledged the measures won't be popular with everyone.

But MacMaster said the housing situation is a problem not just for residents, but also businesses looking to expand. It's too soon to know if the measures will make more supply available or ease the rapid climb in housing prices, but MacMaster said the government had to do something.

He said there are some businesses that are unable to expand because people can't find accommodations. "And it's something that we have to try to fix if we're going to expect our economy to keep rolling along."

NDP Leader Gary Burrill said he supports the measures, but wants the money raised from the new taxes dedicated to creating more affordable housing rather than just going into general revenues.

"They need to increase the supply of the stock of housing that is actually affordable — housing that is affordable at a way that is related to people's actual incomes," he said.

"The only way to do this is for the government to have an equity position in public housing, social housing and housing, the price of which is not determined by an overheated, speculative market."

Motorized activities excluded from tax credit

Other notable tax changes introduced in this year's budget are the return of the personal provincial income tax paid by people younger than 30 working in in-demand sectors on their first $50,000 earned, and a $500 credit for children's activities.

The latter measure is focused on arts, culture, recreation and sports-based activities, including camps. It does not apply to activities where a child "rides on or in a motorized vehicle as an essential component of that activity."

MacMaster said he knows from personal experience that "you can get a lot of exercise on a dirt bike," but he said the government is mindful that some people, including medical professionals, are cautious about encouraging young people to participate in such activities.

"I think we just want to be sensitive of possibly encouraging that activity because it does certainly carry risks."

MacMaster was appearing virtually from his home in Inverness, as he has all week. The minister said he and the rest of his family came down with COVID-19 earlier this week.

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