Looking to invest in property in Nova Scotia? The province offers 8 key government incentives to make real estate investment more appealing while addressing the housing crisis. Here's a quick rundown of what you can take advantage of:
- Tax Breaks: A 1% HST reduction starting April 2025 and an HST rebate for new rental projects (saving $54.1M in 2025-26).
- Funding Programs: Grants and forgivable loans for affordable housing, including the Community Housing Capital Fund and Affordable Housing Development Program.
- Rebates: Up to $8,000 tax-free for eligible new rental properties.
- Energy Efficiency Rebates: Save on insulation, heating systems, and more, with rebates up to $5,000.
- Municipal Support: Programs like the Development Rebate Program and Municipal Capital Growth Program fund infrastructure and commercial development.
- Innovation Tax Credits: Tax perks for investing in property-related tech like smart building systems.
- Large-Scale Capital Investments: A 25% refundable tax credit for projects over $15M.
These programs cater to both private developers and community housing groups, offering financial support, tax savings, and opportunities to create affordable housing. Whether you're investing in multi-unit developments or upgrading properties, Nova Scotia makes it easier to achieve your goals while contributing to housing solutions.
The Affordable Housing Crisis in Nova Scotia Explained
1. Community Housing Capital Fund (NS-CHCF)
The NS-CHCF allows property investors to work alongside community housing organizations. With $3.5 million in total funding, this program provides a one-time capital grant to eligible non-profit and co-operative housing providers to help them purchase multiplex residential buildings with five or more units[2].
This initiative aims to safeguard 117 affordable housing units over a two-year period[3].
Here’s what the program offers:
| Feature | Details |
|---|---|
| Financing Support | Access to the Community Housing Acquisition Program (CHAP) and other financing options |
| Purchase Assistance | Capital grants to help acquire existing residential properties |
| Community Impact | Maintains affordable rents and prevents tenant displacement |
"One of the greatest challenges to scaling the community housing sector in Nova Scotia has been access to capital funding for the acquisition of existing affordable housing. This funding is critical to AHANS's mission to build and buy a meaningful portfolio of affordable housing across Nova Scotia. With this funding, we and our peers will be equipped to compete with the private sector to acquire affordable rental units and keep rents affordable, forever. This program is one of the most impactful ways government can intervene to support Nova Scotians who worry about their next rental increase, a renoviction or losing their rental housing."[3]
Since 2022, the Community Housing Transformation Centre has distributed $3.2 million in grants to support 82 community housing projects[3].
To qualify, organizations need to prequalify through the Community Housing Transformation Centre. Applications are then reviewed in partnership with the NS Department of Municipal Affairs and Housing[2].
For more information, email info@centre.support or join the launch webinar[2].
This program lays the groundwork for further support initiatives, which are detailed in the sections ahead.
2. Affordable Housing Development Program
The Affordable Housing Development Program (AHDP) offers forgivable loans to support the creation of affordable rental housing in Nova Scotia. This partnership between the Province of Nova Scotia and the Government of Canada funds up to 50% of rental units in most projects. For smaller developments (under 10 units), full funding is available [1].
The program focuses on two main areas: building new rental properties and converting non-residential buildings into affordable housing.
| Equity Requirements | Private Developers | Community Housing Groups |
|---|---|---|
| Minimum Contribution | 20% of eligible costs | 5% of eligible costs |
| Acceptable Forms | Cash or unencumbered land | Cash or unencumbered land |
| Project Experience | 5+ years required | 5+ years required |
| Management Experience | Direct or professional company | Direct or professional company |
To qualify for AHDP funding, projects must meet these key criteria:
-
Location and Structure
Developments must be located in Nova Scotia (excluding reserves), consist of self-contained rental units with 12-month leases, and include at least five affordable units [4]. -
Rental Requirements
Rents must be set at least 20% below the average market rent (AMR) and remain affordable for a minimum of 15 years [4]. -
Project Viability
Projects must show financial sustainability and meet or exceed building code standards, including those for accessibility and energy efficiency [4].
Private developers are required to contribute 20% of eligible costs, while community housing groups need to contribute 5%. Contributions can be in cash or unencumbered land. Both groups must also demonstrate at least five years of experience in project development and management.
The application process usually takes 6–8 weeks [1]. Approved applicants receive personalized guidance from an affordable housing specialist.
To apply, submit your project concept to the AHDP office along with the following documents:
- Project proposal
- Cost breakdown
- Operating budget
- Environmental assessment
- Proof of management experience
Keep in mind: The program does not cover renovations of occupied rental properties, student-only housing, manufactured homes, or the purchase of existing rental properties [4].
3. Property Investment Tax Rebate
The Property Investment Tax Rebate offers up to $8,000 tax-free to those purchasing eligible new rental properties [5]. It’s designed for investors focused on long-term rentals, such as new homes, townhomes, or condominiums.
Important: Multi-unit properties like duplexes, triplexes, or apartment buildings, as well as properties meant for flipping, do not qualify.
| Eligibility Criteria | Details |
|---|---|
| Property Type | New homes, townhomes, or condominiums |
| Market Value Cap | $450,000 or less |
| Property Status | Must be brand new and never occupied |
| Application Window | Must apply within 2 years of closing |
| Investment Purpose | Exclusively for long-term rental use |
If you initially buy a property for personal use but later decide to rent it out, the CRA may issue a tax bill to recover the builder's rebate. This can be offset by applying for the Investment Property Rebate [5].
Key Points to Remember
- Hold Period: If you sell the property within two years of receiving the rebate, you’ll likely need to repay the full amount along with interest [5].
- Residency Status: Non-residents of Canada are eligible to apply, as Canadian residency is not required [5].
- Property Value: The property’s fair market value must not exceed $450,000 at the time of purchase [5].
This rebate works alongside other programs encouraging long-term rental property investments in the region.
4. Nova Scotia Innovation Equity Tax Credit
The Nova Scotia Innovation Equity Tax Credit (IETC) provides tax benefits for investors in technology-driven businesses. While not directly aimed at real estate development, it indirectly supports the sector by encouraging advancements in property management and construction technologies. Here's a breakdown of the program and its focus areas.
| Investor Type | Tax Credit Rate | Minimum Investment | Maximum Annual Credit |
|---|---|---|---|
| Individual | 35% (standard) | $1,000 | $87,500 |
| Individual | 45% (ocean tech/life sciences) | $1,000 | $112,500 |
| Corporate | 15% | $50,000 | $75,000 |
Key Investment Requirements
To qualify, the program targets Nova Scotia-based companies that meet the following criteria:
- Fewer than 10 years in operation
- Fewer than 100 employees
- Assets under $15 million
- At least 50% of payroll paid to Nova Scotia residents [6]
Opportunities in Real Estate Technology
Investors can target companies working on advancements like:
- Smart building management systems
- Energy-efficient solutions
- Sustainable construction methods
- Property management software
Holding Period: Investments must be held for at least four years to avoid repayment of the tax credit [6]. This aligns with long-term investment strategies, making it ideal for real estate-focused investors.
Corporate Eligibility Details
Eligible companies must focus on developing or applying new technologies, operate primarily from a Nova Scotia head office, and dedicate most of their assets to creating products, services, or processes [6].
Investment Options: Qualifying investments include newly issued common voting shares, non-redeemable preferred shares (held for at least four years), or convertible debentures [6].
This program not only boosts innovation in Nova Scotia but also offers tax advantages that can complement real estate investment strategies by supporting tech-driven growth in the sector.
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5. Capital Investment Tax Credit (CITC)
The CITC offers a 25% refundable tax credit on the cost of capital equipment purchased for approved projects in Nova Scotia. The credit is capped at $100 million per project [7].
Qualification Requirements
To be eligible for the CITC program, investments must meet these conditions:
| Requirement | Details |
|---|---|
| Minimum Investment | $15 million or more |
| Investment Timeline | Must be completed within 5 years |
| Property Type | Capital equipment intended for use in Nova Scotia |
| Credit Rate | 25% of the capital cost of qualified property |
| Maximum Credit | $100 million per project |
Claiming Process
Corporations can claim the CITC while filing their corporate income tax return. To qualify, all acquisitions must meet the criteria for approved project property [7]. This process highlights Nova Scotia's dedication to encouraging large-scale capital investments.
6. Property Development Rebate Program
The Town of Yarmouth introduced the Development Rebate Program on January 11, 2017 [8], to encourage commercial property investments in the Central Business District. This program offers property owners partial commercial tax rebates for up to 10 years on new construction or expansion projects [8]. It works alongside other provincial incentives but is specifically focused on commercial development.
Eligibility and Application Process
To qualify, property owners need to complete these two steps:
- Sign a Phased In Assessment Agreement: This sets the schedule for gradually increasing the taxable assessed value [8].
- Submit Development Plans: These must align with the Central Business District Improvement Plan By-Law and show clear economic benefits.
| Rebate Feature | Details |
|---|---|
| Duration | Up to 10 years |
| Property Location | Central Business District only |
| Eligible Improvements | New construction or building expansion |
| Assessment Method | Increased taxable assessed value |
| Application Timing | Must apply before development begins |
"The program takes advantage of changes to the Municipal Government Act, allowing for phasing-in of increased taxable assessed value of properties in a commercial development district over up to 10 years, and for cancellation, reduction, or refund of taxes paid as a result." [8]
For more details or help with the application, contact the Town of Yarmouth Economic Development office at edo@townofyarmouth.ca [8].
7. Municipal Capital Growth Program
Municipalities in Nova Scotia are stepping up their support for infrastructure projects through this program. By working with the Department of Municipal Affairs and Housing, you could secure funding for up to 50% of eligible project costs. This initiative focuses on community growth and multi-unit developments, making it a strong addition to the province's various government incentives [9].
Eligible Project Categories
The program covers a broad range of development areas, with municipalities able to invest in up to 18 project categories. These categories are tailored to meet local needs. Here are a few key areas of focus [11]:
| Development Category | Infrastructure Focus |
|---|---|
| Brownfield Redevelopment | Restoring contaminated land |
| Community Energy Systems | Power systems for communities |
| Drinking Water | Water supply and treatment |
| Local Roads and Bridges | Transportation infrastructure |
| Recreation & Sports | Community facilities |
| Wastewater | Sewage and drainage systems |
Investment Requirements and Timeline
Projects must demonstrate improvements in capacity, expanded services, or better accessibility [9]. Additionally, there are options to address climate change-related challenges within project plans [10]. All projects must be completed by March 31, 2026.
Eligible Cost Components
Funding can be used for various project-related costs, including engineering, project management, inspections, administration, construction, and equipment [9]. However, costs such as land acquisition, interim financing, and overhead are not covered under this program [9].
8. Energy Upgrade Rebates
Improving energy efficiency can lower expenses and boost the value of multi-unit properties. In Nova Scotia, there are rebates available for energy-efficient upgrades that apply to both residential and commercial properties.
Rebate Categories and Funding
Nova Scotia offers a clear rebate system for various energy-efficient upgrades. Here's a quick overview of the main categories and their maximum rebate amounts:
| Upgrade Category | Maximum Rebate Amount |
|---|---|
| Home Insulation | Up to $5,000 |
| Air Sealing | Up to $1,000 |
| Windows and Doors | Up to $5,000 |
| Space & Water Heating | Up to $5,000 |
| Renewable Energy Systems | Up to $5,000 |
| Smart Thermostats | $50 |
Heating System Options
The Enhanced Electric Thermal Storage (ETS) program can cut heating costs by 40–70% by using off-peak electricity rates. Efficiency Nova Scotia also increases rebates for Steffes ETS Room Units by 60% [14].
Tax Savings and Extra Benefits
Through the Your Energy Rebate Program (YERP), the provincial portion of HST on home energy products is refunded. This benefit is available to homeowners, landlords, and condominium corporations [12], making energy upgrades more affordable.
Steps to Qualify
To take full advantage of these rebates, property owners and investors should:
- Purchase equipment from Canadian distributors [13]
- Hire licensed professionals for installations [13]
- Complete a pre-retrofit EnerGuide evaluation [13]
- Keep all receipts and related documentation
When combined with other government incentives, these rebates make it easier for property owners to modernize buildings while achieving long-term savings.
Conclusion
Nova Scotia's property programs are designed to improve project feasibility and maximize long-term returns. These initiatives provide a chance to make smart investments while also addressing affordable housing needs.
Program Integration Details
One funding strategy requires private developers to contribute 20% equity, while community housing groups need only 5%. By combining this with other funding sources, developers can meet the criteria for projects that offer rents at least 20% below market rates for a minimum of 15 years [1].
This setup directly impacts both project costs and funding efficiency, making it a practical choice for developers.
Example of Financial Benefits
Helio Urban Development offers a clear example of how these incentives work in practice. Their model highlights cost savings and simplified application processes. For investors, key steps include:
- Keeping annual documentation straightforward
- Engaging program administrators early in the process
- Exploring secondary suites to generate extra rental income
- Prioritizing projects with strong social and community benefits
