The Nova Scotia Association of REALTORS (NSAR) has some concerns over a proposed out-of-province homeownership tax.
If passed, the tax would triple property taxes for those who own a home in Nova Scotia but reside elsewhere.
Roger Boutilier, the CEO of the NSAR, says the organization’s approximately 1,900 partners have been getting a lot of questions about how the tax would impact people who own second homes here; questions they can’t answer.
“It’s kind of frustrating, embarrassing that experts in the industry can’t answer their clients intelligently at this point,” Boutilier says.
“Creating policy without consulting experts”
The proposed tax comes out of a fall mandate letter from the recently formed Houston government.
The NSAR has sent multiple requests for a meeting to discuss the proposed tax to the government, only to be told that staff will consult with industry stakeholders after a draft is done.
“That scares me, quite frankly, because [the staff] are not experts in any way shape or form on the real estate industry and on the unintended consequences or the impacts of any policy they may propose,” Boutilier says.
He’s worried that by the time the government is ready to include stakeholders in the process, it may be too late to make changes.
“It’s disappointing that our new provincial government is creating policy without consulting experts and the people impacted by it.”
Unintended Consequences
While the NSAR isn’t sure what the intent of the proposed tax is, Boutilier says, he thinks it’s an attempt to increase the housing supply in Nova Scotia – one that members feel will have unintended consequences.
“There will be less construction, less renovation, less purchasing at local restaurants and shops,” John Duckworth, Broker of Duckworth Realty says. “It will result in Nova Scotia getting the reputation that you will be penalized if you want to have a second home here. We’re telling these people to go somewhere else; we don’t want you here.”
The impact on Nova Scotia’s economy will be most felt in rural communities, where vacation homes are often located, Boutilier says.
To increase housing stock, Boutilier says we need to make homes more affordable.
The answer may lie in smaller building lots, he says, so builders spend less – and can charge buyers less.
Boutilier proposes several solutions to the current housing crisis, such as legislative changes around the required road frontage for new builds, more density building and constructing semi-detached and link homes, which are more affordable.
Looking ahead
As of Feb. 11, the NSAR has not been invited to meet with the government.
“We just want to be part of the criteria,” Boutilier says. “We’re not saying we’re totally against this, but we need to understand what the intent is and what the criteria is going to be.”
The association heard from the Minister of Finance last week that they’re assessing policy and implementation options and will be in touch to schedule a meeting, says Paige Hoveling, spokesperson for the NSAR.
She’s optimistic they will hear more soon.
The Minister’s office hasn’t responded to a request for comment.
