Provincial Non-Resident Deed Transfer Tax Guidelines
Brian Tabor, QC and Eyoab Begashaw
On April 8, 2022, the Nova Scotia Department of Finance and Treasury Board (Provincial Tax Policy and Administration Division) released the Provincial Non-Resident Deed Transfer Tax Guidelines (“Guidelines”) with respect to the recently introduced Provincial Non-Resident Deed Transfer Tax (“PDTT”), which came into effect April 1, 2022.
The PDTT is a five per cent tax levied on the greater of the purchase price or the assessed value of the property and applies to all residential properties or a portion of the property that is deemed residential, including vacant land classified as residential.
The Guidelines provide general information with respect to the following:
- how the PDTT is applied;
- defining ‘residential property’ and ‘property ownership’;
- defining to whom the PDTT applies to/who is exempt;
- defining ownership types (e.g. resident versus non-resident) and ownership by individuals, corporations, and trusts;
- how the PDTT is calculated;
- how the PDTT applies to non-residents moving to Nova Scotia;
- the PDTT Tax Form submission; and
- paying the PDTT.
Exemptions
The following deed transfers are exempt from the PDTT:
- transactions with an Agreement of Purchase and Sale dated before April 1, 2022;
- transactions only including residential property (or a portion of a residential property) with more than three dwelling units;
- residential property with three or fewer dwelling units being transferred to grantees where 50 per cent or more of the ownership is by residents of Nova Scotia or if the grantees are not residents but they intend to move to Nova Scotia within six months of the property transfer;
- property being transferred between spouses/common-law partners or former spouses/common-law partners (if the transfer is to divide marital or jointly-held assets);
- residential property being transferred to a foreclosing mortgagee or from an executor to an eligible beneficiary under a will (eligible beneficiary is a spouse, common-law spouse, child, grandchild, parent or sibling of the testator or a child or grandchild of the testator’s spouse or common-law spouse);
- if all of the following three factors are true: (i) deeds being registered to confirm, correct, modify, or supplement a deed previously given; (ii) the consideration does not exceed $1.00; and (iii) the deed does not include more property than the previous deed.
- if the grantee is a registered charity and the residential property for which the deed is being transferred is not to be used for commercial, industrial, or other business purposes.
Process
All property transactions, regardless of residency status and property type, require the online Provincial Deed Transfer Tax Form to be completed. Certain transactions may require an affidavit with additional information about the grantee, depending on if the grantee is an individual, corporation, or persons acting as a Trustee.
Provincial Non-Resident Property Tax
The Finance and Treasury Board Minister, Allan MacMaster, introduced the Financial Measures (2022) Act (“Act”) on April 8, 2022. The proposed Act will establish the Provincial Non-Resident Property Tax which also took effect April 1, 2022. The Provincial Non-Resident Property Tax is an annual tax of $2.00 per $100.00 of the property’s assessed value, as determined by the Property Valuation Services Corporation.
We will provide a more detailed update once the Act has been finalized.
This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact a member of our Real Property group.
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