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

The recreational home market in Atlantic Canada is thriving, with Royal LePage Atlantic’s president, Matt Honsberger, stating that the outlook for these properties is stronger in this region than anywhere else in the country. Despite concerns over Nova Scotia’s non-resident deed transfer tax doubling to 10 per cent from five per cent on April 1, Honsberger remains optimistic about the market.

Honsberger pointed out that lakefront properties on the East Coast are available for under half a million dollars, significantly less than similar properties in other parts of Canada that can go for three times that amount. While the Nova Scotia Association of Realtors and others worry that the increased tax could deter buyers, Honsberger believes that it may have a slowing effect but won’t completely shut off the market. Royal LePage is projecting an eight per cent increase in the price of waterfront properties this year.

Despite the tax increase, prices for single-family waterfront homes in Atlantic Canada were nearly 13 per cent higher in 2024 compared to the previous year. The company’s projection of an eight per cent increase this year is double the national average, making East Coast properties more affordable than those in Ontario or British Columbia.

Honsberger highlighted the affordability of properties in Atlantic Canada, with lakefront properties in the Annapolis Valley available for three to four hundred thousand dollars, compared to over a million and a half dollars for similar properties in southern Ontario. Oceanfront properties in Nova Scotia can still be found for under a million dollars, a rarity in cities like Vancouver or Kelowna.

Royal LePage reported that 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. Many Canadians are turning away from vacationing in the United States due to strained relations, opting for vacation homes that can also serve as income properties.

Honsberger noted that non-resident taxes and fees are an easy target, as these buyers do not vote in the province. However, he suggested that the government should consider easing regulations and taxes, as non-residents contribute significantly to the economy. Nova Scotia Finance Minister John Lohr defended the tax increase as a way to give Nova Scotian buyers an advantage over out-of-province competition in house sales.

In conclusion, the recreational home market in Atlantic Canada remains robust despite the tax increase for non-resident buyers. With affordable prices, stunning waterfront properties, and a strong market outlook, Atlantic Canada continues to be an attractive destination for those seeking a vacation or income property.