written on behalf of Feigenbaum Law
We’ve previously blogged about non-resident home buyers and the impact that they have had on housing markets in some of Canada’s largest cities, including Toronto and Vancouver. We’ve also explored the various measures these jurisdictions have taken to address what many see as an increasing problem in an already overheated market.
The data gathered has revealed some interesting patterns and highlights that non-resident home ownership is also becoming a factor in markets outside of what many have viewed to be centers for foreign investment.
For instance, Nova Scotia has a higher rate of property ownership by non-residents (3.9%) than do Ontario (2.2.%) or British Columbia (3.8%). However, rather than purchasing homes or condos in that province’s cities, most of these non-resident buyers are buying vacation properties.
In Nova Scotia the region with the highest level of non-resident home ownership is Cape Breton, particularly Richmond County in the east where more than 14% of properties (primarily vacant land and detached homes) are owned by non-residents.
Other areas of the province attracting a high rate of non-resident ownership are:
- District of Shelburne (13.2%)
- Southern Inverness County, Cape Breton (11.9%)
- St. Mary’s District in Guysborough County (11.1%)
- Southern Victoria County, Cape Breton (10.2%)
Interestingly, Halifax has a lower non-resident ownership rate (2.5%) than Vancouver (5.0%) or Toronto (2.6%). In Halifax, non-resident ownership is primarily in vacant land (5.2%) and condos (4.5%), whereas in Vancouver and Toronto non-resident ownership is primarily in condos (8.4% in Vancouver and 6.0% in Toronto).
Reactions in Nova Scotia
The trend in non-resident ownership was first taken note of almost 20 years ago, leading to research and the extensive gathering of information and data.
According to a former county warden who spoke with CBC News, the concern was not necessarily “people from outside coming in”, but, rather, the fact that people or corporations were purchasing land and then not developing it or moving to live on it.
Some of these fears were founded, and vacant properties did exist; however, it did not seem to happen to the extent that people were initially concerned about. Many properties are used, whether year-round or only in the summer. The county warden noted that the majority of non-resident owners are from land-locked European countries or landlocked areas in the U.S. who sought oceanfront or ocean adjacent property.
Further Reviews Are Undergoing
Now that Statistics Canada has released its information, The Canadian Mortgage and Housing Corporation is further analyzing the data.
A Senior analyst at the Corporation told CBC News that it was “slightly surprising” that Nova Scotia’s rate of non-resident ownership was above B.C. and Ontario since it has primarily been B.C. making the news in terms of foreign buyers.
He also noted that the seemingly reverse pattern of non-resident ownership outside of Halifax was also interesting, saying:
I think that’s one thing that we are trying to better understand when it comes to non-resident ownership, is to why non-residents would invest in the housing market in different places and the reason that they do…I think it comes down to different issues: whether they are investing in it as an asset, a future asset for income purposes, or just for retirement….We need to better understand between the two differences. In cases like Nova Scotia, for example, it could just be a case of ex-pats who are planning to retire back home and are buying land.
How Can Feigenbaum Law Help?
We will continue to follow real estate trends across Canada and will provide updates as more information becomes available, including the potential impact changing markets may have on estate plans, personal tax planning, and corporate tax planning.
In the meantime, if you have questions about your tax or estate plan, including tax planning as it relates to major assets such as real estate, contact Feigenbaum Law.
Our goal is to create the best tax strategy possible for our clients. We work with you to create a personalized solution that will streamline your compliance requirements. Our cross-border lawyers and accountants provide tailored services to U.S. and Canadian clients with cross-border assets and business operations.
If you are an American living in Canada that may purchase a residential property, we can review your potential tax liabilities, and explore any possible exemptions that may be available.
Contact us online to learn more about how we can help or call us at (416) 777-8433 or toll free at (877) 275-4792.