Planned deed transfer tax doubling would be like a 'tariff' on Canadian buyers
A proposed plan to double Nova Scotia's deed transfer tax on homes bought by non-residents has realtors worried it could discourage buyers, depress property values, and hurt local economies.
The province intends to increase the deed transfer tax from 5% to 10% for out-of-province buyers starting April 1. Provincial finance officials say the hike is meant to help Nova Scotians compete better against buyers from outside the province and is projected to raise an additional $13 million in revenue.
However, the Nova Scotia Association of Realtors (NSAR), which represents over 2,000 professionals, argues the tax could unintentionally harm local sellers and rural communities.
Suzanne Gravel, who will soon take over as president of NSAR, described the tax increase as effectively adding a "tariff" against Canadian homebuyers, an approach she believes contradicts Canada's broader effort to encourage trade and investment across provincial borders.
"It instantly gives a person [a] 'they don't want us to come there' feeling," Gravel said in an interview with CBC News. "It's a big tax, it's a big tariff."
She plans to formally present her concerns before the provincial legislature’s public bills committee on Monday.
"To say we want to share, we want to be able to do business across provincial lines and then this," Gravel said. "That's keeping everybody out because we're the only province that does this."
Local real estate experts warn the tax will likely cause potential buyers to reconsider their purchases, which could force local sellers to lower asking prices. Realtor John Duckworth, from Chester, described the proposal bluntly as a "'don't come here' tax," which sends a negative signal to buyers from outside the province.
"I don't know what the premier's trying to do with this, but the whole thing is just totally negative," Duckworth said, pointing out that properties attractive to non-resident buyers aren't typically the same ones local buyers seek.
Economist Dominic Osberg agreed, noting that the cost of such taxes typically ends up being shared by both buyer and seller, with sellers forced to drop their asking prices to compensate.
"It's always going to be partly the buyer and partly the seller [who pays the deed transfer tax] in proportion to how badly they want to sell or buy," said Osberg.
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Nova Scotia Finance Minister John Lohr previously defended the tax increase, describing it as providing Nova Scotians with “a slight advantage” in competing for homes against out-of-province buyers.
Duckworth questioned the economic rationale behind the government's claims, especially given how much non-resident homeowners contribute to local economies.
"I'd love to see the economic study that was done to prove to the province that this was going to be a net increase in economic activity here," Duckworth said. "I'm sure they haven't done any studies and I'm sure they're not going to understand the unintended consequences."
Local property owner James Wooder also expressed fears about broader negative impacts, particularly in communities reliant on external investors.
"Somebody thought it was a good idea, but they didn't think about the knock-on and unintended consequences of this, which could be disastrous," said Wooder. He noted the potential negative impact on developers already invested in the area, particularly those involved in preplanned or ongoing developments.
Recent market statistics underline these concerns. Nova Scotia home sales softened in January, with total sales reaching 558 homes, while the benchmark home price rose to $415,400, a 6.2% increase year-over-year.
Active listings grew by nearly 10%, reaching 3,164 homes, marking the highest inventory level in five years for January. This increase reflects broader economic uncertainty, driven partly by the ongoing trade tensions with the United States and recent shifts in Canadian immigration policy.
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