What is the Nova Scotia Non-Resident Deed Transfer Tax?

What is a Deed Transfer Tax? And what is the Provincial Non-Resident Surcharge?

A Municipal Deed Transfer Tax is a land transfer tax applied to the purchase of a piece of property in Nova Scotia. Each municipality sets the rate for this tax, which is a percentage of the purchase price of the property. The rates as of July 2022 ranged from 0% to 1.5% for residents of Nova Scotia and abroad.

The Provincial Non-Resident Deed Transfer Tax (PDTT) is an additional tax which is applied to the purchase of certain properties in Nova Scotia for non-residents. We will explore what type of properties it applies to and what makes you a resident below. The PDTT is 5% of the sale price or the assessed value of the residential property, whichever is greater.

What is the PDTT for?

The PDTT appears to be intended to ensure greater availability of housing stock in Nova Scotia for Nova Scotia residents.

When did the PDTT come into effect?

The PDTT was first announced in the 2022-23 Provincial Budget. It is effective for all purchase and sale agreements for real property, and other specific transfers of land in Nova Scotia, commencing 1 April 2022. 

What qualifies a property to fall under the PDTT?

The PDTT applies to all residential properties or portions of property deemed residential with 3 dwelling units or less, including vacant land that is classified as residential. 

What qualifies someone as a Nova Scotia resident?

A person is assumed to be a Nova Scotia resident if they have filed income tax returns in the province of Nova Scotia in the previous year. Even if you are a resident, you will still need to fill out the Provincial Deed Transfer Tax Form, for more details see below in “What is the Process involved in PDTT?”

Am I subject to the Provincial Non-Resident Deed Transfer Tax if I plan to move to Nova Scotia?

Purchasers who state their intention to move to Nova Scotia within 6 months of the date the property is transferred are required to demonstrate proof of Nova Scotia residency after moving to Nova Scotia. This will be done by completing the Proof of Residency Form and providing supporting documentation. The form and supporting documentation must be emailed to NSDeedTransferTax@novascotia.ca, and the Proof of Residency Form can be found here: Proof of Residency Form.

What if the purchaser is a corporation?

There are three statements which must be met to grant a corporation status as a Nova Scotia resident. These can be found on page five of the Nova Scotia Provincial Non-resident Deed Transfer Tax Guidelines (PDF). 

What is the process involved in PDTT?

After 1 April 2022, purchasers need to complete the online Provincial Deed Transfer Tax Form for all property transactions, regardless of residency status and property type. This form can be found here: Provincial Deed Transfer Tax Form.

Certain property transactions require an affidavit with additional information about each grantee. The affidavits for each grantee must be uploaded to the online form when prompted.

• Affidavit of Residence – For Individuals (PDF)
• Affidavit of Residence – For Corporations (PDF)
• Affidavit of Residence – For Persons acting as a Trustee (PDF)

Are certain properties exempt from the Provincial Non-Resident Deed Transfer Tax?

Some deed transfers are exempt from the PDTT. These include:

• Transactions involving an Agreement of Purchase and Sale dated before 1 April 2022
• Transactions only including residential property (or a portion of residential property) with more than three dwelling units (such as an apartment block)
• Residential property with three or less dwelling units being transferred to grantees where 50% or more of the ownership is held by residents of Nova Scotia
• Residential property with three or less dwelling units being transferred to grantees who are not residents of Nova Scotia, if they intend to move to Nova Scotia within 6 months of the property transfer
• Property being transferred between spouses or common law partners (or former spouses or common law partners) if the transfer is for the purpose of division of marital or jointly held assets
• All of the following apply:
  • Deeds being registered to simply confirm, correct, modify, or supplement a deed previously given,
  • There is no consideration beyond $1 and
  • The deed does not include more property than the previous deed 
• Residential property being transferred to a foreclosing mortgagee
• Residential property being transferred from an executor to an eligible beneficiary under a will. An 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.
• Residential property being transferred from an administrator of an estate to a person entitled to the estate under the Intestate Succession Act or the intestacy laws of another jurisdiction
• Transactions only including property classified as commercial/resource (no portion of the property is classified as residential)
• Transactions where the grantee is a registered charity and the residential property in this transaction will not be used for commercial, industrial or other business purposes

How can Brookshire Law Office help me with the process?

Each property transaction will require an assessment against these new measures to see whether the tax is applicable.  There may be strategies to mitigate it.

The property lawyers at Brookshire Law Office are here to assist you through these changes. Contact us today to book a consultation with our real estate lawyer, Alan Freckelton, if you require legal assistance in understanding these changes or to assist you in the completion of your real estate transaction.

This blog is meant for informational purposes only and is not a replacement for legal advice.