Deed Transfer Taxes in Nova Scotia

Some of you may have heard about the Welcome to Wolfville tax. The tax referred to is the Deed transfer tax and unfortunately this pernicious levy is not only extracted in Wolfville; we suspect that at least some of the municipalities around have learned from our example here. Wolfville is a leader in the province after all.

Our town has had this tax since the year 2000. In 2003 it was increased from 1% to 1.5% which is the maximum rate allowed by law- if our Council could approve more it probably would!

Now please, consider the effects of this tax. What does it mean for the town and for sellers- and for buyers, prospective residents?

First, generally buyers don’t know about it until it is too late, then whammo, they find out about it as the deal is about to close. Welcome to Wolfville.

OR If they do know about it then you can bet the buyer factors it in to any price he is willing to pay for a property in Wolfville, in which case it becomes a penalty to the seller who in effect pays it out of his desired sale price.

Also it means any buyer who knows about it will not be at all interested in offering any more in the sale price for any fittings which might be included such as appliances, drapes, or furniture as this only needlessly increases the “value” of the transaction on which the tax is based. The smart buyer or seller should suggest a separate transaction for those. One could ask why one should pay tax on the value of the building or any fittings, such as appliances, as the deed registry only really records the transfer of ownership of the land. If you sold the house and contents and retained ownership of the land, would there be a deed transfer tax?

What about the Town? Well, it means more taxes of course. It is a hefty tax and as it more than matches the tax rate it doubles what the town squeezes from any property in the year it sells. Does the town care if there is a lot of property turnover in Wolfville? Does it care if new residents are disappointed and leave? Does it care if long term residents on fixed incomes can’t afford to pay the increasing taxes every year because their disposable income is either static or shrinking? [No Bob, a higher assessment is NOT income!] Why would this money hungry administration care? The more turnover of property the better from their point of view. It may, however, make property more difficult to sell compared to other jurisdictions.

Does this tax make Wolfville more affordable for young families, commonly listed as an aim of this administration? Our Councillors did not see it as an “impediment” when it raised the rate from 1% to 1.5% in 2003 but we don’t agree.

As we mentioned, other municipalities have cottoned on to this nasty little trick. Some of them have the decency to extract less than the maximum (towns less flush in funds than Wolfville too, towns like Amherst, Canso, and Port Hawkesbury which charge only .5%); some of them ( like Hantsport where our illustrious CAO lives and Kings County, both right next door) resisted the temptation – so far anyway- and don’t yet levy it at all.

What other effects does this tax have? Well, we think it might encourage people not to register their deeds when property is transferred. After all one is not required by law to do so. [link to source]

A list of municipalities which have this tax and how much each one charges is information not at all easy to find, but one of our many sources has managed to dig up a list for us. As a public service and as a guide to every potential home buyer in the province – here it is.

DEED TRANSFER TAX RATES
(Approximate to date)

Municipal Unit:

Cape Breton Regional Municipality (1.5%)
Halifax Regional Municipality (1.5%)
Queens Regional Municipality (0.5%)

Towns:
Amherst — (0.5%)
Annapolis Royal — (1.5%)
Antigonish — (1.5%)
Berwick — (1.5)
Bridgetown — (1.5%)
Bridgewater — (1%)
Canso — (0.5%)
Digby — (1.25%)
Clarkes Harbour — (1%)
Lockport — 1.5%
Lunenburg — (1%)
Middleton — (1.5%)
Mulgrave — (1%)
Mahone Bay — (1%)
Parrsboro — (1%)
Port Hawkesbury — (0.5%)
Shelburne — (1%)
Stewiacke — (1%)
Truro — (0.5%)
Windsor — (1.5%)
Wolfville — (1.5%)
Yarmouth — (1%)

Rurals:

Annapolis — (1.5%)
Antigonish — (0.5%)
Chester — ( 1%)
Clare — (0.5%)
Colchester — (0.5%)
Digby — (1%)
Guysborough — (1%)
Hants East — (1.5%)
Hants West — (1%)
Inverness — (1.5%)
Lunenburg — (0.75%)
Richmond — (0.5%)
Shelburne — (0.5%)
St. Mary’s — (0.75%)
Victoria — (1%)
Yarmouth — (1%)

Units With No Deed Transfer Tax

Towns:

Hantsport
Kentville
New Glasgow
Oxford
Pictou
Springhill
Stellarton
Trenton
Westville

Rurals:

Argyle
Barrington
Cumberland
Kings
Pictou

NOTE TO READERS; THIS INFORMATION WAS CORRECT WHEN THE POST WAS WRITTEN IN AUG 2008 . PLEASE CHECK WITH THE MUNICIPALITY TO CONFIRM THE INFORMATION,  AS CHANGES ARE POSSIBLE.

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One response to “Deed Transfer Taxes in Nova Scotia

  1. Pingback: Do higher taxes matter to house buyers? « Wolfville watch