NS Provincial Deed Transfer Tax Calculation is Changing July 1st

Update from the Province on Provincial Deed Transfer Tax changes coming July 1, 2023.

Provincial Deed Transfer Tax Calculation is Changing July 1st

An amendment was made to the Non-resident Deed Transfer Tax Act during the legislature’s 2023 Spring sitting, is changing the way the Provincial Deed Transfer Tax is calculated, effective for property transfers as of July 1, 2023, with a transition period based on when the purchase and sale agreement was made.

For Closing Dates between April 1, 2022 and June 30, 2023: [The tax remains the same as it as been since it came into effect last year]

The tax applies on deeds being registered where ownership interest of more than 50% is being granted to 1 or more non-residents of Nova Scotia. The tax is calculated as follows:

PDTT = 5% x The Greater of: [Sale Price or Assessed Value]

Closing Dates on or after July 1, 2023: [Change]

The tax applies to deeds being registered where any ownership interest is being granted to non-residents of Nova Scotia. The tax is based on the ownership interest being transferred to non-residents and is calculated as follows: PDTT = 5% x Total Ownership Interest being Transferred to Non-Residents x The Greater of: [Sale Price or Assessed Value]

There will continue to be an exemption for non-residents who move to Nova Scotia within 6 months. However, that exemption will be at the individual grantee level. All non-residents who are moving to Nova Scotia within 6 months must provide proof of residency for the exemption to apply.

For example: If a property is transferred to 2 non-residents who intend to move to Nova Scotia within 6 months, the tax would not be payable at the time of the transfer. However, if only 1 can provide proof of residency at the end of the 6 months, the tax (plus interest and a potential penalty) will become applicable on the ownership interest of the grantee who could not provide proof of residency.

There will be a transition period for transactions involving an Agreement of Purchase and Sale (APS):

1. For an APS signed from April 1, 2022, to June 30, 2023:

• If the deed transfer (closing date) is before July 1, 2023 – then the tax calculation method under the original legislation applies,
• If the deed transfer is after July 1, 2023 – then the grantee(s) can choose to calculate the tax (and pay) according to the method under the original legislation or according to the method under the updated legislation as of July 1st, 2023.

2. For an APS signed after June 30, 2023 – then the tax calculation method in the updated legislation as of July 1st, 2023, applies.

If you have any questions please send an email to: NSDeedTransferTax@novascotia.ca.

Guidelines and additional Provincial Deed Transfer Tax related information can be found on our webpage: https://novascotia.ca/nonresidentdeedtransfertax