Contractors Corner – Taxes & fees in the Home Building & Renovations industry

In Nova Scotia and in particular the greater Halifax (HRM) area, when building and renovating homes, the public is becoming increasingly burdened with taxes, fees and development charges.

In Nova Scotia unlike British Columbia, Alberta, Ontario and Quebec there are no licences required for anyone to build or renovate a residential home; nor is there a governmental requirement for a warranty. So, in Nova Scotia and HRM anyone can build a home for themselves or others with-out taking any responsibility for their actions or providing a safe work environment.

Many new home and renovation projects are complete for cash only and indeed cut into the basic tax structure of the province. Known as the “underground economy,” this billion-dollar industry pays no taxes. It is an unregulated and unorganized buyer beware situation, yet the public are competitively attracted to the ‘pay less’ tax free discounts and end up having a new home or renovation that has issues down the road. There is no protection against these thieves, which can turn into a nightmare.

As a member of the Canadian Home Builders Association – Nova Scotia (CHBA-NS), our membership is a strong association of dedicated housing professionals who are well trained in building science, construction technology, building code requirements and occupational health and safety. A shortage of skilled labour means an ever-increasing payroll to provide competitive, good paying jobs, not to mention costs for ongoing training, to keep employees in Nova Scotia. We pay our statutory remittances, business taxes, WCB levees’ and pay attention to what’s required. But more importantly we take responsibility for our actions, we are professional builders and renovators. 

The material costs of building a home are and have maintained a relatively constant value over the years. Commodity items such as lumber and plywood have been up and down. The lower price of oil has led to consistent pricing for vinyl, plumbing and roofing products. The only issue we have is imported products where the currency exchange is higher, but basically the materials used haven’t increased substantially over the past 10 years. 

We have seen increased costs for labour and increased overhead cost for what we have to provide to assure our due diligence. As professional builders and renovators we are concerned as housing affordability has become a major issue for the residents of Nova Scotia and HRM.

Fees for building lot development, capital cost charges on land, subdivisions fees of 5% of land value, permits fees (plumbing permit, development permit, lot grading permit, solid waste charge, blasting permits, demolition permits, streets and services permit and building permits). Then there are regional development fees where new construction pays towards upgrading existing services for wastewater and water. Then there is the HST (15%) and for new homes a 1.5% deed transfer tax. For new homes these additional fees can be as high as 20% of new home purchase costs. 

New development, homes and renovation projects, provide critical tax revenue to our province and city, via property taxes as well as direct and indirect jobs. It is important for all governments to remember the value of our professionally run industry when considering extra cost or raising development charges. The costs are placed on the home building and renovation sector as well as the purchasing public, and if the government is not careful, they may just “cook the goose that lays the golden egg.”

I hope you have found this article both helpful and informative. My goal is to help educate and make the public more aware of the significant skill, professionalism and organization that is required to be a Trusted Professional in the renovation and new home building industry.

By Dan Monk

Dan Monk is a Professional Engineer (P.Eng.), Red Seal Carpenter and the Owner of Monk Renovations.  Dan and the team at Monk Renovations can provide you with an outstanding home renovation experiences regardless of the size of your project. Twitter @monkrenovations Facebook & Instrgram @monkreno www.monkreno.com