Realtor says non-resident deed transfer tax not enough to stop recreational home demand

The market outlook for recreational homes in Atlantic Canada is stronger than anywhere else in the country, says the president of Royal LePage Atlantic in Halifax, despite widespread concern over the doubling of Nova Scotia's non-resident deed transfer tax.

Matt Honsberger said Wednesday that lakefront properties are available on the East Coast for under a half-million dollars, but can go for three times that or more in other parts of the country.

The Nova Scotia Association of Realtors and others have said the province's non-resident deed transfer tax, which increases to 10 per cent from five per cent on April 1, could turn off buyers.

Honsberger said it might affect some, but Royal LePage is still projecting an eight per cent increase in the price of waterfront properties this year.

"I think there's a little bit of politics at play there," he said. "I do think that it has a slowing effect on it. I don't think that it shuts the taps off completely, because when you look at apples-to-apples comparisons in other provinces, we're still going to be affordable, even with that tax."

Royal LePage's latest numbers show prices for single-family waterfront homes in Atlantic Canada were nearly 13 per cent higher in 2024 over the previous year.

East Coast properties more affordable

The company's projection of an eight per cent increase this year is still double the projected national average.

Honsberger said properties are still more affordable in Atlantic Canada than in Ontario or B.C.

"If you want a lakefront property in the Annapolis Valley here, you can probably find a reasonable lakefront property for three or four hundred thousand dollars," he said.

"If you're someone who's in southern Ontario looking to have a vacation property in the Muskokas on a lake, you're probably north of a million and a half dollars. You can still get oceanfront property in Nova Scotia for under a million dollars and you'd be hard pressed to find that outside of Vancouver or Kelowna or some of those areas."

Royal LePage said the median price of a single-family home in Atlantic Canada last year was $461,900, while the median price of a single-family waterfront property was $598,000.

Non-residents an easy target

Honsberger said many Canadians are choosing not to vacation in the United States because of deteriorating relations between the two countries.

He said many are looking for vacation homes that in some cases can double as income properties, despite Nova Scotia's hike last fall in short-term rental fees. 

Honsberger said non-resident taxes and fees are an easy target, because the buyers don't vote in the province, but he said the government should consider easing regulations and taxes anyway, because non-residents contribute a lot to the economy.

On the day Nova Scotia Finance Minister John Lohr introduced the province's plan to double the deed transfer tax for non-residents, he told reporters increasing the tax was a way to give Nova Scotian buyers a leg up on out-of-province competition when it comes to house sales.

"If a Nova Scotian is bidding for a home and someone else is bidding on it as a cottage, we want that Nova Scotian to have a slight advantage and that's what that non-resident deed transfer tax is — a slight advantage for a Nova Scotian," Lohr said at the March 5 bill briefing.