Death and Taxes - Part 1

Monday, March 19, 2018


You are going to die.  [possible exception]

Taxes are also inevitable.  The question is how much and specifically for this post, how much will you pay for your woodlot?

Let's connect a couple of dots:
  • Nova Scotia has over 30,000 small woodlot owners
  • These land holdings represent over 50% of the forested land in the province
  • 100 years ago, these owners largely used the land to support themselves
  • Designated 'Resource Exempt' for property tax purposes, the annual tax bill was negligible
  • Now days, fewer woodlots provide financial returns

So ... you may be getting a sweet tax deal on your woodlot even though it isn't currently being used in the way 'Resource Exempt' was originally intended.  What gives? 

This is where [Property Valuation Services] comes in.

Their job is to place a value on all properties in Nova Scotia.  Municipalities then know the value of their properties, figure how much cash they need to survive and set the tax rate.

They also have the ability to change the classification of 'Resource Exempt' to something else.

For example, you inherited a piece of land from Grandpa and he worked all his life on the farm and woodlot.  You now own the property and are benefiting from the 'Resource Exempt' tax classification but you haven't and probably never will sell anything from the woodlot.

[Property Valuation Services have a responsibility to reclassify your property.If they determine that you are not a 'bona fide' commercial forest operation, your rate changes.

What is 'bona fide'?  Take a closer look at the slide at the top of this post for some specifics.  In a nutshell, there has to be some intent to make money.

Next week : what to do???

Homework : look at your most recent tax bill.  How much did you pay for your woodlot?  How was it classified?

***

Many thanks to Emily Wrobleski, Rebecca Vorstermans and Carlos Resendes from Property Valuation Services Corporation for speaking with me.  Their job is valuing properties and they do not set tax rates or determine tax policy.


You Might Also Like

0 comments