Category: Foreign Buyers

While there is a section on applicable taxes in the Buyer’s Guide: How to Buy Land in Nova Scotia, the topic is worth a deeper dive. That is particularly true due to the recent increase in capital gains inclusion rates that became effective across Canada in 2024.

Deed Transfer Taxes

The most common tax to be aware of is the Municipal Deed Transfer Tax (MDTT). Municipal Deed Transfer Tax rates are set by each municipality, and generally range from 1.0% to 1.5% of the sale price of the property. At the bottom of the post, you’ll find the applicable MDTT rate for each municipality in Nova Scotia. Municipal Deed Transfer Taxes are collected on behalf of the municipality through Land Registration Offices when the deed is registered/recorded. 

Provincial Non-Resident Deed Transfer Taxes (PDTT)

Here’s the fun part for out-of-province buyers. As of April, 2022, property buyers who are not residents of Nova Scotia must pay an additional 5% in deed transfer tax. This is in addition to the municipal deed transfer tax. The PDTT applies to all residential properties with 3 dwelling units or less, including vacant land considered to be residential property.

NOTE: the PDTT will be 5% in most cases, but it is actually the greater of the assessed value of the property, or 5% tax on the sale price of the property. 

Capital Gains Tax

When selling vacant land, capital gains tax may apply. The difference between the sale price and the original purchase price, minus any eligible expenses, is considered a capital gain. This tax is not part of the purchase and sale process; instead, it’s a requirement as part of the tax return filing of the seller. Capital gains are reported at tax time using Schedule 3, Capital Gains (or Losses).

There are some exemptions. If you’re selling your principal residence – the home you live in – you are exempt from capital gains. But if it’s a second home, a cottage, or just a big ol’ parcel of land you own, you’re on the hook for capital gains.

When you complete the Schedule 3, you’ll enter your original purchase price, sale price, and any eligible expenses including selling and closing costs. The resulting gain after those deductions is what you’ll pay tax on. The tax rate on your first $250,000 of capital gains in a calendar year is taxed at 50%. Any amounts above that are taxed at 67%. For a quick calculation of how much tax you may owe, try the Capital Gains Tax Calculator from Lari.ca.  

 

Taxes Due to an Estate on Death

I’m going to touch on some possible tax events to your estate in the event of your death. Sorry to get morbid, but I do think there’s a real awareness gap here. Land is a funny type of asset. In many cases, it’s passed on to family through the generations. Meanwhile, the value of that land is increasing and, in the event of death it can trigger … you guessed it… capital gains tax. 

 

Upon the death of the owner, the property is deemed to be disposed of at its fair market value. Any resulting capital gain must be reported on the final tax return of the deceased, potentially leading to a significant tax bill. The land can be transferred to a surviving spouse if one exists – this basically defers the tax until a future date when the surviving spouse passes away.

 

To give a quick example, in 1990, Paul inherits a 250-acre woodlot from his parents. Taxes are all paid up by the time the deed transfer is completed, so Paul was not impacted by that and didn’t need to get involved. He spends decades enjoying the woodlot and trails with his family. Meantime, the market is driving real estate prices much higher in the area. Fast forward to today and Paul has passed away. Diving into his estate, his son is shocked at the extent of the capital gain on that land.

  • Original market value (1990): $40,000
  • Current market value (2024): $350,000
  • Capital gain tax payable: $165,020

Effectively, the cost of keeping that land in the family is $165,020 which will be deducted from the assets of Paul’s estate and significantly reduce the funds that his son inherits. These are just pretend figures of course, but I feel this scenario is quite real for many people who may not be aware of the implications. 

There are estate planning strategies that might help you reduce the ultimate tax bill if you have substantial land assets. Those are beyond my scope of advisement and I’d recommend talking to a good financial planner or accountant.

GST/HST on Sales of Vacant Land

I’ve written on this topic in the Buyer’s Guide: How to Buy Land in Nova Scotia, so I won’t duplicate that here. In a nutshell, if the land being sold is owned by an individual and was used solely for personal use, GST/HST does not need to be charged or collected from the seller. There are nuances to this including land that has been subdivided into multiple portions. For a good source straight from the Government, read the info here. 

Property Taxes on Nova Scotia Land

Of course, for any owner of Nova Scotia land, there are property taxes to be paid each year. I’ve written a fair bit about how property is valued and the impact on your taxes in my post called Your Property Assessment and Nova Scotia Property Tax.

 

To wrap up this topic, you will find the list of Nova Scotia municipal deed transfer tax rates below. And here are links to other topics on buying land in Nova Scotia that might interest you:

Municipal Deed Transfer Tax Rates

This data is current as of July, 2024. Municipal tax rates can change over time. For a current snapshot, visit the Provincial website. 

County Municipality Rate Payable at LRO
Annapolis Municipality of the County of Annapolis 1.5% Kentville
Annapolis Town of Annapolis Royal 1.5% Kentville
Annapolis Town of Middleton 1.5% Kentville
Antigonish Municipality of the County of Antigonish 1.0% Amherst
Antigonish Town of Antigonish 1.5% Amherst
Cape Breton Cape Breton Regional Municipality 1.5% Sydney
Colchester Municipality of Colchester 1.5% Amherst
Colchester Town of Stewiacke 1.0% Amherst
Colchester Town of Truro 1.0% Amherst
Cumberland Municipality of the County of Cumberland 1.5% Amherst
Cumberland Town of Amherst 1.25% Amherst
Cumberland Town of Oxford 1.5% Amherst
Digby Municipality of the District of Clare 1.0% Kentville
Digby Municipality of the District of Digby 1.0% Kentville
Digby Town of Digby 1.5% Kentville
Guysborough Municipality of the District of Guysborough 1.0% Sydney
Guysborough Municipality of the District of St. Mary’s 1.25% Sydney
Guysborough Town of Mulgrave 0.5% Sydney
Halifax Halifax Regional Municipality 1.5% Halifax
Hants Municipality of the District of Hants East 1.5% Kentville
Hants West Hants Regional Municipality 1.5% Kentville
Inverness Municipality of the County of Inverness 1.5% Sydney
Inverness Town of Port Hawkesbury 1.5% Sydney
Kings Municipality of the County of Kings N/A N/A
Kings Town of Berwick 1.0% Kentville
Kings Town of Kentville 1.5% Kentville
Kings Town of Wolfville 1.5% Kentville
Lunenburg Municipality of the District of Chester 1.5% Bridgewater
Lunenburg Municipality of the District of Lunenburg 1.25% Bridgewater
Lunenburg Town of Bridgewater 1.5% Bridgewater
Lunenburg Town of Lunenburg 1.5% Bridgewater
Lunenburg Town of Mahone Bay 1.5% Bridgewater
Pictou Municipality of the County of Pictou 1.0% Amherst
Pictou Town of New Glasgow 1.0% Amherst
Pictou Town of Pictou 1.0% Amherst
Pictou Town of Stellarton 1.0% Amherst
Pictou Town of Trenton 1.0% Amherst
Pictou Town of Westville 1.0% Amherst
Queens Region of Queens Municipality 1.5% Bridgewater
Richmond Municipality of the County of Richmond 1.5% Sydney
Shelburne Municipality of the District of Barrington

1.5%

Real estate investors in any part of the world are looking for the same thing: under-valued real estate investments with high upside potential. And if you’re not looking at Canada’s Atlantic coast as a promising opportunity, you might be missing out  In particular, I feel Nova Scotia’s land market has the most to offer. Here’s 8 reasons why:

01

Canada is closed to foreign home buyers

The Prohibition on the Purchase of Residential Property by Non-Canadians Act effectively shut the door for foreigners looking to purchase residential property in Canada for all of 2023 and 2024. But guess what’s exempt? Land! Foreign investors can buy all the land they like, and build houses on it too. For foreigners who want to invest in Canada’s lucrative housing market, it’s as simple as buying raw land with development potential, and then build, baby, build!

Next, let’s look at why Nova Scotia is a particularly great place to invest…

02

Nova Scotia has some of the cheapest land per acre in Canada

While we’re not necessarily buying farmland, the farmland values index from Statistics Canada is a useful measure of the relative value of acres in each province. The data shows that an acre of farmland in Nova Scotia averages $3,913, lowest among the Maritime provinces and second only to the Prairies.

 

Province

Average cost of land/acre – 2023 (CAD)
Ontario

$19,685
British Columbia $10,056
Quebec $9,964
Newfoundland / Labrador $8,642
Prince Edward Island $6,452
New Brunswick $4,340
Nova Scotia $3,913
Alberta $3,728
Manitoba $3,439
Saskatchewan $2,384

Next, looking at the growth of land prices by province from May 2020 to May 2024, the Atlantic provinces of PEI, Nova Scotia, New Brunswick, and Newfoundland/Labrador really stand out. While other regions have seen dramatic growth in land values, the East Coast is holding steady at affordable prices. For anyone looking to buy low, now is the time.

 

Province Land Cost Increase (05/2000 to 05/2024)
Quebec 17.35%
British Columbia

12.93%

Ontario

 11.63%
Prairie Region 6.57%
Atlantic Canada 2.08%
Canada (Average)

11.23%
Source: Statistics Canada

 

03

Homes are selling at record-high prices in Nova Scotia

Sure, you’re just buying land, but residential housing figures are important for determining the potential value of the land once developed. The second column in the table below lists the average selling price of homes by province based on May, 2024 data. The third column compares home prices with land prices to show how many acres of land one could buy based on the average selling price of homes in that province. The higher the number the better, indicating you can buy land that, if developed, will pay off more richly than it would in other areas. Nova Scotia’s numbers are near the top, second only to the prairie provinces of Alberta and Saskatchewan. But don’t head for the Prairies based on that data. Read on for more reasons why Nova Scotia is by far our number 1 choice.

 

Province

Avg. cost of land/acre – 2023 (CAD)

Avg. home price – May, 2024 (CAD)

 Home Price / Land Cost Ratio
Ontario

$19,685

 $890,634 45.2

British Columbia

 $10,056

$1,001,736

 99.6
Quebec

$9,964

 $498,124 50.0
Newfoundland / Labrador

$8,642

 $306,184 35.4
Prince Edward Island $6,452 $391,819 60.7
New Brunswick

$4,340

 $338,740 78.1
Nova Scotia $3,913 $464,661 118.7
Alberta $3,728 $507,706 136.2
Manitoba $3,439 $371,224 107.9
Saskatchewan $2,384 $328,029 137.6

04

Nova Scotia is growing fast, with a bold pledge to reach 2 million residents

In 2021, Nova Scotia’s provincial government launched its Population Growth Strategy, setting a goal of reaching the 2 million mark by 2060. To reach this target, Nova Scotia will have to welcome 25,000 newcomers every year going forward. The program started well, with over 60,000 newcomers to Nova Scotia in the first two years. In Nova Scotia, you have a clear population growth mandate, backed intensely by the government and with programs to support it. All of those newcomers will create an increasingly competitive market for land and housing – exactly the type of demand that drives price increases.

  Population (May 2020)

Population (May 2024)

 Growth Rate
Canada (Avg.) 38,006,941 41,012,563 7.91%
Prince Edward Island 158,401 177,081 11.79%

Alberta

4,405,455

 4,849,906 10.09%
Yukon

41,807

 45,750 9.43%
British Columbia 5,169,535 5,646,467 9.23%
Nova Scotia 986,204 1,072,545 8.75%
New Brunswick 782,512 850,894 8.74%
Ontario 14,752,374 15,996,989 8.44%

Manitoba

 1,379,280 1,484,135 7.60%
Quebec 8,550,900 9,030,684 5.61%
Saskatchewan 1,169,038 1,231,043 5.30%
Nunavut 39,137 40,758 4.14%
Newfoundland / Labrador 527,733 541,391 2.59%
Northwest Territories 44,565 44,920 0.80%

Source: Statistics Canada

05

Housing in Nova Scotia is already in drastically short supply

  1. What do all those newcomers to the province need? A roof over their heads would be a great start. A 2023 study by consultant Turner Drake & Partners found that Nova Scotia will be short 41,200 homes in less than five years, and the shortage in housing units could reach 80,400 within 10 years. So, let’s add up a few observations on the Nova Scotia real estate market so far: 
    1. It has some of Canada’s cheapest land available, which can be purchased by any foreign resident
    2. Houses are selling for over half of a million CAD on average
    3. The population is growing rapidly with a goal of doubling residents by 2060
    4. It’s expected the province will be short about 80,000 homes within 10 years

When you add all these factors together, it creates a pretty compelling case for foreign investors.

06

Nova Scotia has breathtaking scenery and beautiful coastlines

Remember comparing land values with the Prairie provinces earlier? Consider that in Nova Scotia you can find cheap land that has ocean views, mountain trails, streams, forests, or access to one of thousands of beautiful lakes. You can find that in British Columbia, but you’ll likely pay 5 times as much per acre. Having gorgeous scenery that adds to your land’s market value gives land buyers a wider variety of options based on the specific features they are looking for.

07

The weather in some areas of Nova Scotia is far more pleasant than you may think

There are different micro-climate areas areas all over the province, but if you’re dreading harsh Canadian winters you may be in for a nice surprise. Nova Scotia’s South Shore area, extending from Halifax to Shelburne, has quite mild winters compared to the harshness many Canadians endure.

While it might seem silly to compare Nova Scotia’s climate with California’s, have a look at the monthly average high/low temperatures of Shelburne, NS as compared to San Francisco, CA. A colder winter to be sure, but the temperature differences are far less than one might expect.

  Shelburne, NS
San Francisco, CA
January 1° / -9° 14° / 8°
February 1° / -9 16° / 9°
March 5° / -4 17° / 10°
April 10° / 0° 18° / 11°
May 16° / 5° 19° / 12°
June 21° / 9° 19° / 12°
July 24° / 12° 19° / 12°
August 24° / 13° 20° / 13°
September 20° / 8° 21° / 13°
October 14° / 3° 21° / 13°
November 9° / 0° 18° / 11°
December 3° / -6° 14° / 8°

08

Nova Scotia has an abundance of natural resources that fetch a premium in other places

As our world continues to face the strain of sustaining our population, some of the most fundamental resources that we take for granted stand to increase in value. Construction engineers are learning that using mass timber for construction instead of concrete can dramatically reduce the greenhouse emissions for new buildings. Water is becoming increasingly polluted in some areas, requiring more expensive treatment or the need to import from a cleaner source. And environmental scientists are finding new uses for age-old resources that previously had little value, such as that sea kelp you find all over beaches on the Nova Scotia coast. For most local and foreign investors, it comes back to one basic resource: trees, trees, trees. With some education and good silviculture processes, even a small stand of trees can become a viable income source. Investors who eye long-term investment growth will get it – it’s like slow-motion farming – each year that your trees grow they increase in value. To learn more about woodlot investing, visit our post on Nova Scotia Woodlot Management.

 

Why Wait?

Don’t let today’s opportunity be tomorrow’s regret. There’s a compelling case for foreign investors to buy land in Nova Scotia. 

If you’re looking for a place to start, try our free Buyer’s Guide: How to Buy Land in Nova Scotia. Or explore the site for tips on land development, conducting title searches, access to zoning maps and land use bylaws, and so much more.

Lake Ainslie - waterfront land for sale

We’ve previously written about how the Nova Scotia Non-Resident Deed Transfer Tax may impact foreigners hoping to buy land in Nova Scotia. But here we’re discussing a different type of legislation (the federal government’s Prohibition on the Purchase of Residential Property by Non-Canadians Act, which came into effect Jan 1, 2023). This Act is far more impactful on the ability of foreign residents to buy land in Nova Scotia. And for a change, there’s good news to share.

Today the CBC posted an article titled “Federal Government eases some restrictions on non-Canadians purchasing property.” The government is walking back restrictions that were passed into law earlier in 2023. 

Here’s some good news. People from outside Canada who have a work permit or are allowed to work here can now buy a home. Just make sure you have 183 days or more left on your permit and only buy one property.

What about buying vacant land? Yes, one of the included amendments repeals the existing provision so that foreign buyers are not prohibited from buying vacant land.  The zoning of the plot of land is important. Non-Canadians and foreign businesses can now purchase vacant land that is zoned as residential or mixed use. After purchase, the vacant land can be used for any purchase by the buyer, including development of residential properties. 

This is a welcome change as we are in the midst of a housing shortage crisis in Canada, particularly in areas like Nova Scotia that are seeing high levels of immigration. Allowing foreign residents to purchase vacant land in Nova Scotia, and develop into affordable housing, will help reduce market pressures and support Nova Scotia’s economic growth. 

If you’re ready to start your journey to buy land in Nova Scotia, we recommend starting with our Guide: How to Buy Land in Nova Scotia – it’s loaded with advice for first-time land buyers in NS and written specifically for someone shopping from a distance. In it, you’ll also find links to the various Nova Scotia land use bylaws and zoning maps, statistics on land sales in Nova Scotia, and so much more. 

Two additional posts you may find valuable are:

 

(Note: this post deals with the provincial deed transfer tax affecting foreign buyers. View this post for information on the repeal of restrictions for foreign buyers purchasing vacant land in the Federal Prohibition on the Purchase of Residential Property by Non-Canadians Act). For a full overview of all the types of taxes applicable for a land owner in Nova Scotia, read our post on Taxes on Land Sales in Nova Scotia.

 

Effective April 1, 2022 the Province of Nova Scotia introduced a non-residential deed transfer tax. It is described as a measure to make home ownership for Nova Scotians more accessible. The tax amounts to 5% and is paid as deed transfer tax when a property changes hands. 

 

So what about vacant land? Vacant land is subject to the 5% transfer tax if it is classified as “residential”. To my understanding, this includes all land except land classified as “resource” or “commercial”. Most individuals aren’t buying vacant land classified as commercial, however the “resource” classification is not uncommon. On forested lands, there can be a percentage split between “residential” and “resource”. 

 

There are some exceptions, for example if you plan to move to Nova Scotia within six months. You can see full details here. Unfortunately, most out-of-province buyers will be dinged with this new tax. To give an example of the difference, let’s take the average vacant land sale price from our recent post on Nova Scotia vacant land sales statistics: $72,250. There’s a deed transfer tax calculator on wowa.ca. So, on that $72,250 purchase, an out-of-province buyer is paying $4,696.25. A Nova Scotia resident, in contrast, would pay $1,083.75.

 

So congratulations to Premier Tim Houston –  you’ve chased off a whole class of buyers that were ready and eager to invest in Nova Scotia. Many of these buyers are also developers, with an interest in building on vacant land. Are they building luxury vacation homes so they can helicopter in on weekends, eat caviar and splash around in the pool? No, most that I know are looking to build… wait for it… affordable single-family homes. This new housing would then be sold on the market, providing a much-needed boost in the amount of homes available for local buyers. 

 

With this new tax, many developers will simply look elsewhere. Nova Scotia’s production rate of affordable housing will be limited to the slow pace provided by local economies. It’s a penny-wise-pound-foolish approach designed to win popularity points with voters who tend to perceive “outsiders” as the problem for whatever ails them. 

 

According to a CBC article, there are about 28,000 non-resident property owners in Nova Scotia. Of these, 42% hold vacant land. It’s not a large number for a province the size of Nova Scotia, and the vacant landholders in particular are not to blame for a shortage of affordable housing in Nova Scotia.

 

The legislation brought a lot of negative attention to the Nova Scotia government, leading them to pull back on another component: the non-resident property tax. And the distaste for the new taxes wasn’t limited to foreigners. As one Nova Scotian commented online: “Everyone except the xenophobic types saw this as the bad idea it was.”