HALIFAX — Nova Scotia Premier Tim Houston announced Thursday the government is cancelling a planned property tax on non-residents because it risked hurting the province's reputation.
Houston told reporters after a cabinet meeting that when the measure was announced in March, he hadn't anticipated that the province's image as a welcoming place would be threatened.
“We did lots of analysis on this policy, but we did not foresee this would change the view of Nova Scotia in the eyes of people,” he said.
The Progressive Conservative government introduced two taxes for non-resident property owners in its March 29 budget as a way to encourage out-of-province owners to sell their homes to locals and increase the available housing stock.
The annual tax forcing non-resident owners to pay $2 per $100 of assessed value of their residential properties is now cancelled.
A deed-transfer tax, which requires new buyers to pay five per cent of the property's value if they do not move to the province within six months of the closing date, will go ahead.
The taxes, which had entered into effect April 1, drew fire from dozens of owners who testified in public hearings last month that the measures were unfair and discriminatory.
For Michelle Keall, a Nova Scotian who lives in Ontario, the province’s reversal is a major relief. “My husband and I had discussed selling our cottage as a result of this, and now we don’t have to,” she said in an interview Thursday.
Keall was born and raised in Bridgewater, N.S., and moved to Ontario 25 years ago. She purchased a house in Queens County in 2014. Now retired, Keall spends five to six months a year in Nova Scotia visiting her parents, siblings, nieces and nephews.
“My parents are just so relieved,” she said, “and I’m so glad they (the government) listened.”
The proposed annual tax would have added an additional $9,000 to her costs, she said.
On Tuesday, the province had reduced the annual property tax before removing it entirely Thursday. “I won’t allow anything to undermine the welcoming nature of this province,” Houston told reporters.
The tax was projected to bring in $65.5 million in the 2022-23 fiscal year. The remaining property deed-transfer tax is estimated to bring in $15.5 million over the year.
The province had not started collecting the non-resident tax before it was scrapped.
This report by The Canadian Press was first published May 5, 2022.
This story was produced with the financial assistance of the Meta and Canadian Press News Fellowship.
Lyndsay Armstrong, The Canadian Press