March 30, 2022
Issue 2022-13
On March 29, 2022, Nova Scotia’s Minister of Finance and Treasury Board, Allan MacMaster, presented the province’s budget. The budget does not change personal or corporate income tax rates, but does introduce:
This Tax Insights discusses these and other tax initiatives outlined in the budget.
The budget does not change Nova Scotia’s personal income tax rates. Top combined federal/Nova Scotia personal income tax rates are shown below. These rates apply to individuals with taxable income above $221,708 in 2022 ($216,511 in 2021).
Top combined federal/Nova Scotia rates |
2021 |
2022 |
|
---|---|---|---|
Ordinary income & interest |
54.00% |
||
Capital gains |
27.00% |
||
|
eligible |
41.58% |
|
non-eligible |
48.28% |
The budget introduces the MOST tax refund. Starting the 2022 taxation year, MOST will provide a refund of provincial personal income tax paid on the first $50,000 of an individual's earned income for individuals under the age of 30 who are employed and registered in selected skilled trades and occupations. The government will provide further details in regulations, but the initial selected occupations will be in Nova Scotia’s manufacturing, computer and information technology, transportation, film, video and service sectors.
Starting the 2022 taxation year, the new children’s sports and arts tax credit will provide a $500 refundable tax credit for parents with children under the age of 19. The tax credit applies to eligible expenses incurred by parents for their children’s participation in artistic, cultural and physical activity programs.
Effective beginning the 2022 taxation year, the budget introduces fertility and surrogacy rebates, which will provide a refundable tax credit or rebate of 40% on eligible expenditures, up to an annual maximum of $8,000 for each rebate. Eligible expenditures are medical expenses:
Nova Scotia’s corporate income tax rates will remain as shown in the table below. The table also shows combined federal/Nova Scotia corporate tax rates.
Federal and Nova Scotia corporate rates |
Nova Scotia |
Federal + Nova Scotia |
|||
---|---|---|---|---|---|
|
2021 |
2022 |
2021 |
2022 |
|
General and M&P income |
14% |
29% |
|||
Canadian-controlled private corporations (CCPCs) |
active business income to $500,000 |
2.5% |
11.5% |
||
investment income |
14% |
52.67% |
The budget announces that the Innovation Rebate Program (IRP) will be made permanent. The IRP provides a rebate of 25% of eligible project costs (up to a maximum rebate amount of $3,750,000) for eligible projects that assist Nova Scotia companies invest “in their own facilities, in innovative processes and in green technologies to reduce emissions and become more sustainable.” For purposes of the IRP, the project must be approved by Nova Scotia Business Inc. and completed within three years of the approval date.
The budget introduces the non-resident deed transfer tax, effective April 1, 2022, at a rate of 5% of the value of residential real property purchased by a non-resident of Nova Scotia. The tax will apply to transactions for which the agreement of purchase and sale was entered into after March 31, 2022. Non-resident purchasers who move to the province within six months of the transaction’s closing date can claim an exemption from the tax.
Effective for the 2022-23 fiscal year, the budget proposes to implement a non-resident property tax, of $2 per $100 of assessed value on residential real property owned by a non-resident of Nova Scotia. The tax will not apply to residential properties that: