New taxes targeting non-resident homeowners won’t address the affordable housing issue according to a local realtor.

Measures announced in last week’s provincial budget will impose a five per cent deed transfer tax on the sale price of a home and a provincial tax of $2 per $100 of a home’s assessed value for anyone from outside the province purchasing a house in Nova Scotia.

Kristopher Snarby, managing associate broker with Exit Interlake, says everyone knows a lack of available housing has caused prices in the purchase and rental markets to soar but taxing buyers from outside the province won’t solve the issue.

“These new rules are only applying to people who don’t live here full time,” said Snarby. “For example, for me in the past year, I’ve dealt with a lot of Ontario buyers and Western Canadian buyers but they’re all moving here full time so nothing’s going to change on that front.”

Another issue Snarby sees is the homes that would be subject to the tax aren’t generally in the price range for first-time homebuyers.

“It’s not the bread and butter. It’s not the $100,000 homes or the $200,000 homes. Probably a lot of them are oceanfront, lakefront, really high-end homes that are in the half million to a million-dollar range, and in Halifax even more, maybe. So, that’s the other part of the puzzle is that it’s not really the houses that the general public can afford.”

Snarby says many of the non-resident homeowners have come to the area year after year, supporting local businesses and services and have become part of the fabric of the community.

“My fear is we’re upsetting a lot of people who have contributed a lot to the province over the years and kind of slamming the door in their face saying, 'hey, you’re not welcome here anymore,'” said Snarby.

Province says measuring effect of taxes will take years

Finance Minister Allan MacMaster says taxing non-residents will make more housing available in Nova Scotia because it attacks the problem on a couple of fronts. First, the tax will raise money that government can put into affordable housing; and second, it should cool demand for houses from buyers outside the province.

“It’s an inexact science. I will not come on and make claims that this will solve everything, these taxes will solve everything. But we do believe that they will have some impact and over the next two years we’ll be building a database,” said MacMaster. “We’ll know just how much we’ll be raising in terms of revenue, and we’ll know just how much of an impact these taxes will have on the housing market and whether or not they do, in fact, increase supply for Nova Scotians.”

Despite announcing the taxes to tackle the housing crisis, MacMaster says money collected won’t be set aside, instead, it will go into the provincial government’s general revenue.

“We haven’t collected a cent of these taxes to date, but we’ve already spent money last fall. We ear-marked $35 million for affordable housing, we added another $15 million in the budget that was introduced a week or so ago,” said MacMaster. “We’re taking in money and there’s money going out the door all the time and practically speaking, sometimes it’s difficult to just say, okay, we’re going to use these funds for a certain purpose.”

MacMaster says government will continue to look for ways to help Nova Scotians into homes but is definite on one thing.

“We need more housing. Whether it’s government purchased and managed housing, whether it’s co-operative housing or whether it’s private sector.”

MacMaster acknowledges building up the housing stock will take time and in the interim, government will make more rent supplements available to get people into rental units that may be outside their budget.

The new tax measures went into effect April 1.

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