NEW GLASGOW - It's too early to tell how a new deed transfer tax will impact Pictou County's real estate market in the future, but local realtors say the prospect of the tax has already affected consumer patterns.
Remax realtor Sarah Taylor said she experienced a rush during the month of August, with many of her clients attempting to close on a deal before the tax became effective. The one per cent tax applies to anyone purchasing a home or parcel of land, with several exceptions.
"It really created a bit of a rush in August for me for sure. And I think it really did for the rest of the office," Taylor said.
"People who were not sure if they wanted to buy yet - it kind of gave them that extra push. So, I'm sure it did help the economy a little bit. Now whether it will go down from last year in the fall, I don't know."
But Taylor also said the rules as to when exactly her clients would be charged the tax was unclear.
"People were kind of confused, and we had lawyers saying different things," she said. For example some believed that if a deal was closed prior to Aug. 31, the tax wouldn't be applied, while others had different ideas.
"So I don't think it was handled by the municipalities very well. They weren't very clear on when you should close to avoid it - or what dates that would take place - or really, anything about it," she said.
New Glasgow realtor and broker Sherry Blinkhorn of Blinkhorn Real Estate Ltd. said she recently learned that any purchases or agreements that were started prior to the implementation of the tax would avoid it.
"That was something new that we didn't realize was going to happen."
As for business this month, Blinkhorn said things have slowed slightly - but she couldn't say how much a deed transfer tax had to do with it.
Susan Green of M.B. Green Realty also said it was too early to know the impact of the tax.
"It has been somewhat quieter than it was in July and August, to date, in activity," she said.
Generally, Green said September and October are productive months.
"I find them to be good selling months, because there's a back-to-school, back-to-business type of mindset. And, you know, we have had a wonderful year, to date. I'm very happy about that."
Where the realtors agree is that the tax, however it plays out in the long run, is not a very welcome one.
Blinkhorn said when the tax was drafted, out-of-pocket costs to buyers weren't considered.
"You can't borrow to get it. Just like you can't borrow for a location certificate, for adjustments, closing costs," she said. "My personal opinion is that we're penalizing first-time home buyers, which will have a domino effect on the real estate industry."
Green said the impact of the tax extends beyond first-time home buyers as well.
"When you think about the reasons why people buy houses - a lot of the time it's because of difficult situations, not positive ones. For example, if somebody's aging and moving into a smaller home, somebody had a new baby - somebody lost a job and they have to sell... Buying a home is not a luxury item to tax, it's a needs-based item.
"If you're buying a $100,000 house, all of a sudden you have to come up with $1,000 more that you can't mortgage, that you get zero benefit for - other than you and everybody else will eventually, hopefully, get to enjoy whatever the money goes towards. But we're building it on the backs of first time homebuyers."
Clients sure don't love it, said Taylor.
"It's a lot of extra money out of their pocket that can't be added to their mortgage.
"And I think another bad feeling on it is that even if it doesn't go to the wellness centre, it will stay and go towards pavement or sidewalks. People aren't really loving that aspect too much either."
Green said when every other level of government is attempting to stimulate the housing sector, it seems counterintuitive to burden it with a tax.
"The housing sector is directly responsible for an incredible number of spin-off jobs," she said.
"Anything that slows the market is a significant cause for concern when we're trying to get people back to a more sustainable level of employment."
