The Nova Scotia government has cancelled plans to impose a property tax surcharge on non-resident home and cottage owners. The announcement comes less than two weeks after enabling legislation was adopted through the Financial Measures Act, which enacted the 2022-23 provincial budget.

“My intentions all along were to improve home affordability, not to be at odds with our core value of being a welcoming province,” Premier Tim Houston maintained, as he announced a pullback from the policy he first unveiled during his election campaign last year.

As proposed, then approved this spring, residential property owners who paid income tax in jurisdictions outside Nova Scotia would be levied an additional $2 per $100 of assessed value. With exemptions for multi-residential dwellings with more than three units and other properties that accommodated Nova Scotian tenants, the budget projected the surcharge would generate about $65.5 million in new revenue in the 2022-23 fiscal year.

Meanwhile, home purchasers from outside Nova Scotia are subject to a new deed transfer tax as of April 1 this year. That measure, which was also introduced in the 2022-23 budget, will collect a one-time fee equivalent to 5 per cent of the value of the property transaction, and is projected to generate about $15.5 million in new tax revenue for 2022-23.

Non-resident purchasers will be exempt from the deed transfer tax if they move to Nova Scotia within six months of the closing of the sale.