ST. MARY’S – If non-resident property owners in Guysborough County break their piggy banks this summer, it may be to pay for home improvements, not new taxes, thanks to a stunning reversal of provincial policy last week.
Less than a month after levying an additional $2 for every $100 of assessed value on the seasonal homes of people who do not live year-round in Nova Scotia, the government has cancelled the measures that would have doubled or tripled annual taxes for some owners.
Facing growing outcry from non-resident owners and housing advocates, Premier Tim Houston announced the reversal during a 30-minute question and answer session with media following a cabinet meeting in Halifax on May 5.
“When I ran to be premier, I promised I would be a solutionist and that word means something to me,” he said. “It means having the humility to recognize that when you do something wrong, you learn from those mistakes and do better. That’s why I’m here to tell you today that we are no longer going forward with then non-residents property tax. The reputation of our province is more important than any policy, and it’s certainly more important than my personal pride.”
Houston, however, did retain the five per cent deed transfer tax on the purchase prices or assessed values—whichever is higher—on local properties owned by people whose primary residences are outside the province.
“The deed transfer will stay, but the property tax itself will not apply,” he said. “Nova Scotia is a welcoming province and I want that message to be heard loud and clear.”
The message was, indeed, music to the ears of at non-resident owners of properties in the municipal districts of St. Mary’s and Guysborough, two of whom told The Journal they now plan to plow money into their seasonal spreads this summer.
“The money that I would have had to give to taxes I can now spend on my place in Nova Scotia,” said Lee Wormington, a Toronto resident who owns a mini-home with his wife Julie on Lochiel Lake, about 30 kilometres north of Sherbrooke. “I am definitely getting some materials for some work around the place.”
Added Dave Ridgeway of Alberta, who owns a summer place near Manchester: “It’s great news for me, because I’m going to put a metal roof on the cottage. So, the monies that would have gone towards that tax are now going to be spent on a company in Dartmouth that makes that metal roofing.”
Houston had said the new tax policy was “meant to be a tool to support housing,” but he’d never specified how the expected $65 million a year in extra revenue would be used to address the shortage of affordable stock, a serious and growing problem.
That lack of clarity fuelled criticism—and even threats of pulling up local stakes—among non-resident property owners from across Canada and as far away as Europe when the measures were introduced in mid-April.
“An annual penalty tax for non-residents is just counterproductive,” wrote Christoph Mause of Ratingen, Germany, who owns a seasonal home in Liscomb, in a letter to Houston on April 22. “It also doesn’t help solving the housing crisis caused by government, itself. Seasonal residents, in particular, bring millions of dollars into the province of Nova Scotia every year, building new homes, employing local service providers, and thus supporting local communities in structurally weak areas.”
He added: “I’ve already heard from friends that they are thinking about selling their vacation homes and some of my neighbours who have recently purchased lots in Gegogan Harbour/Liscomb have already announced that they probably won’t build under the new conditions.”
At the news conference last week, Houston said, “When you realize that the tool you have in your hand might not get the job done, you look for another tool,” adding: “I commit to finding a tool to make home affordability—particularly for first-time home buyers—a reality in this province.”
No further details about alternatives to the scrapped tax were available.
“I think the loss of revenue is certainly going to be a concern, especially if that money was going to be directed towards building affordable housing,” said Nancy O’Regan, executive director of The Guysborough County Housing Network. “This is going to certainly reduce that. The government is going to keep the transfer tax, so I think that’ll give a little bit of extra revenue.”
Still, she added, the reversal was the right thing to do. “I’m pleased,” she said. “I think we’ve heard a lot from residents of Guysborough County who have summer homes here and family roots here. It was just the unfairness of it, and we have heard from people from other provinces who really want to keep their properties here and plan to use them.”
Meanwhile, both Ridgeway and Wormington praised Houston for his reversal.
“Governments and leaders at the moment are rarely willing to admit to making a mistake,” Wormington said. “So, I was, like, ‘Wow … Okay, they made a mistake and now they’re backing away.’ I was just impressed.”
Said Ridgeway: “Kudos to [Houston] for seeing his way through this. It takes a braver politician than most to do this.”