Millennial CAP DTT
Nicole and Matt are thrilled to have found their first home. These millennial parents of two children, have been approved for a mortgage, have confirmation of their down payment from the provincial Down Payment Assistance Program (DPAP), and have worked with their REALTOR® to find the perfect home for their family. Now, what else do they need to do before they move in?
Well, aside from a home inspection and meeting conditions of their purchase agreement, they need to figure out their taxes. Figure them out? Yes, that’s right! There’s two taxes that come into play when you’re making a decision to buy a home in Nova Scotia.
The first tax is Deed Transfer Tax (DTT). This tax must be paid to your town or municipality within 10 days of closing on your home, when your lawyer is registering your title. The rate of DTT varies by community, but it can range anywhere from 0 – 1.5 per cent of the purchase price. Matt and Nicole are purchasing their home in (PLACE) so their DTT will be (PER CENT) which works out to be (TOTAL) or (PER CENT) of their down payment. Nicole and Matt worried about this tax before purchasing, but luckily they qualified for the DPAP, so they have a little extra cash saved they can use towards this expense.
The other tax that will impact Nicole and Matt, for years to come, is their property tax. Every homeowner in Nova Scotia pays property taxes. These taxes, collected by your town or municipality, help pay for services like fire, police, roads and waste collection, but how do property taxes work? Nicole and Matt are about to find out.
Legislation in Nova Scotia places a “CAP” on the amount that residential property assessments, used to calculate your taxes, can increase year over year. When a home is purchased, however, the “CAP” will not remain and the new owner’s property taxes will be based on the assessed value of the home, unless it is purchased by a family member. This means that Nicole and Matt need to figure out exactly what their taxes will be, because they won’t be the same as the former owners.
Now that Matt and Nicole have figured out their total taxation costs – including the DTT to be paid within 10 days of closing and their new property tax – they’re ready to finalize everything and set the closing date with their REALTOR®.
NSAR is the professional association for over 1500 REALTOS® in Nova Scotia. Visit www.trustedguide.ca or REALTOR.ca to find your REALTOR®.