2022 Nova Scotia provincial budget tax highlights

On March 29, the Nova Scotia government released their 2022 budget. The following are highlights of the key tax measures.

Personal tax measures

No personal income tax rate changes were announced in this year’s budget. The current personal combined income tax rates for 2022 are outlined below:

Children’s sports and arts tax credit

Effective January 1, 2022, and subsequent taxation years, the province is introducing a $500 refundable tax credit to help parents offset the costs of artistic, cultural and physical activities for children under the age of 19. The tax credit will apply to eligible expenditures for programs in specific areas, including:

• Literary arts
• Visual arts
• Performing arts
• Music
• Media
• Languages
• Customs
• Heritage
• Organized physical activities and programs

Fertility and surrogacy rebates

Effective for the 2022 and subsequent taxation years, the province will implement the Fertility and Surrogacy Rebates.

The Fertility Rebate will provide a 40 per cent refundable tax credit for a maximum annual rebate of $8,000. The rebate is based on eligible medical expenses incurred by an individual, their spouse or common-law partner for infertility treatments.

The treatments must be provided by a Nova Scotian licensed medical practitioner, and there is no limit on the number of treatments that an individual can claim.

For families employing the use of a surrogate, the program will provide a 40 per cent rebate (up to a maximum of $8,000 per year) for medical expenses paid for on behalf of a surrogate (provided that the surrogate does not also claim medical expenses for the treatments). Expenditures claimed under the surrogate program are not eligible for the fertility rebate.

More Opportunities for Skilled Trades (MOST) tax refund

Effective for the 2022 and subsequent tax years, MOST will provide a refund of personal income tax on the first $50,000 of earned income for individuals under the age of 30 who are employed and registered in selected skilled trades and occupations. Eligible sectors will include:

• Manufacturing
• Computer and IT
• Transportation
• Film
• Video
• Service sectors in the province

The legislative changes are expected to be included in the Financial Measures Act 2022.

Non-resident property tax

The province will implement a non-resident property tax of two per cent of assessed value on residential real property owned by a non-resident of Nova Scotia, as of April 1, 2022.

The tax will not apply to residential properties that contain more than three units, nor to residential properties that are leased to individual Nova Scotian residents for a period of at least twelve months.

When a property has multiple owners, an exemption from this tax is provided if 50 per cent or more of the owners are residents of Nova Scotia.

Legislation is expected to be introduced in the Financial Measures Act 2022.

Non-resident deed transfer tax

There will be a deed transfer tax for property purchased by non-residents of Nova Scotia. A tax of five per cent will be assessed on the value of the residential real property from April 1, 2022.

All purchasers of residential properties who are residents of Nova Scotia are exempt from the deed transfer tax. An exemption from the tax will be in place for non-resident purchasers who move to the province within 6 months of the closing date of the transaction.

Legislation is expected to be introduced in the Financial Measures Act 2022.

Corporate tax measures

No corporate income tax rate changes were announced in this year’s budget. The current corporate income tax rates for 2022 are outlined below:

Next steps

Contact your Baker Tilly advisor to learn more about how we can help you navigate the complexities of the Canadian tax system.