New property tax complicating N.S. seasonal residents' retirement plans
Some property owners are considering selling their seasonal homes
Some people who live in Nova Scotia seasonally say they're considering selling their homes in the province because of a new property tax.
The non-resident property tax was included in the Progressive Conservatives' provincial budget released last week. It charges $2 per $100 of assessed value to "non-resident" homeowners — those who principally live elsewhere — and it took effect Friday.
The tax has been billed as a measure to improve housing availability in Nova Scotia, and the PCs expect it to generate about $65.5 million in revenue to help fund programs to respond to the pressing needs of the province's growing population, including health care and education.
Vivian Lyons, who is from Virginia, expects her property tax bill to triple this year, totalling an estimated $27,000. She and her husband own a house in Kingsburg, located on Nova Scotia's South Shore, where they live for about six months every year.
Lyons called the new tax confiscatory and said she's doubtful it will solve the problem it was created to fix. She said about half of her neighbours in Kingsburg are seasonal residents.
"Real estate is simply a game of supply and demand and the supply in Nova Scotia simply is not meeting the demand," said Lyons, who was a realtor for 30 years. "Taxing people in rural areas is not going to encourage construction in urban areas."
The provincial government said there are about 27,000 properties owned by non-residents in the province.
A spokesperson for the Finance Department said there is housing scarcity across Nova Scotia and non-resident-owned residential properties are found across the province.
Bob Camozzi, who owns a home in Cape George in Antigonish County, said uncapped property assessments, which effectively result in a premium on property for non-residents, already work well to balance the market in rural areas.
"People are never going to be happy with a surcharge or a tax," said Camozzi, who lives in Oshawa, Ont., but typically spends May to October in Nova Scotia. "But we pay them because we know they're needed for local services that benefit our neighbors and our friends."
Like Lyons, Camozzi expects his tax bill to increase threefold, to about $12,000. He said he understands the government needs revenue but the decision to increase taxes on seasonal residents will only turn people away.
He said seasonal residents in Cape George have strong ties to the community and make a big contribution to the local community through volunteering and supporting local businesses.
"I would say 55 to 60 percent of what I'll call non-residents were actually born and raised in Antigonish County," Camozzi said.
"What it's not is kind of an ultra-rich community where you just kind of buy these places and go once or twice a year. It's people that come and spend a significant amount of time."
Camozzi said selling his property would be a "last resort" because he and his wife have talked about living there permanently one day and eventually passing it on to their children.
Nicola Hubbard said she and her husband are considering selling their house in Chester. She expects an additional $18,000 on her tax bill this year.
"It was our intention to spend a good portion of each retirement year [there], to leave it to our daughter who thought, 'Oh, I'll get married there. That would be a beautiful place,'" Hubbard said. "None of that seems possible anymore."
Impact on tourism, local economies
Hubbard said the new tax ignores the contributions seasonal residents make to the community.
"When you've got people there for months, you're already collecting a lot of HST," said Hubbard who grew up in Nova Scotia and now lives in Texas as a dual citizen.
She added that friends often visit in the summer months and she expects if seasonal residents start selling their houses, it will have a big impact on tourism in the province.
"I've got three or four people from Texas who want to come up and visit Nova Scotia," she said. "Trust me, they're not coming to Nova Scotia if they can't be visiting us."
Hubbard said she hopes the tax is amended to include exemptions for Canadian citizens to encourage people not to cut ties with the province.
The finance department spokesperson said non-residents are subject to many taxes and fees such as motive fuel taxes and HST.
"Individuals will have an opportunity to express any concerns they have when the bill goes before law amendments," the spokesperson said.