Commercial Real Estate Taxes and Incentives in Nova Scotia and California

An owner of a commercial building pays tax on it in three main ways: an annual property tax set locally, a one-time transfer tax when the property changes hands, and income tax on the rent, reduced by depreciation. Incentive programs can lower the cost of building or restoring a property, but most come with strict conditions and dates.

This article covers how each of these works in Nova Scotia and California, the two places UBU Financial operates, for owners of apartment buildings, hotels, shopping centres and other commercial property. It is general information, not tax or legal advice. Rates change every year and depend on the municipality or county, so confirm current figures with the assessor, your lawyer and your accountant.

Property tax in Nova Scotia

In Nova Scotia, assessment and taxation are split between two bodies. The Property Valuation Services Corporation (PVSC) determines the assessed value of every property in the province each year and sends the assessment roll to all 49 municipalities. Each municipality then sets its own tax rates and bills owners.[1] Property taxes make up about 80% of most municipalities’ revenue, according to PVSC.[1]

The 2026 assessment reflects market value on January 1, 2025 and the physical condition of the property on December 1, 2025, so physical changes such as renovations made by December 1 are reflected in the next year’s assessment.[2] PVSC bases values on sales data and financial information as well as property characteristics.[2]

Commercial owners do not get the cap that limits assessment increases for many homeowners. The Capped Assessment Program applies only to eligible residential property with fewer than four dwelling units; commercial properties and new construction are not eligible.[3] An apartment building with four or more units is therefore assessed at full market value every year.

In Halifax, commercial property has been taxed under a structure of five tax areas and tiered rates since April 1, 2023, replacing the old urban, suburban and rural split.[4] If you disagree with an assessment, the signed appeal form must reach PVSC by the date on your assessment notice, which is 31 days from the date the notice was mailed. Unresolved appeals can continue to the Nova Scotia Assessment Appeal Tribunal.[5]

Property tax in California

California works very differently because of Proposition 13, approved by voters in 1978. The property tax rate is limited to 1% of assessed value plus the rate needed to pay voter-approved bonded debt. Property is reassessed to market value only when it changes ownership or new construction is completed, and in between the assessed value generally cannot rise by more than 2% a year.[6]

For a buyer this means the tax bill resets at purchase, often sharply for a building the seller held for decades. The new value takes effect immediately through a supplemental assessment rather than waiting for the next January 1 lien date.[6] Selling interests in the company that owns a building can count too: when a legal entity that holds California real property undergoes a change in control or ownership, it must file form BOE-100-B with the Board of Equalization within 90 days, and the county assessor reassesses the property.[7]

Owners who think the value is too high can file an assessment appeal application with the county board of supervisors, sitting as a local board of equalization, or the county’s assessment appeals board. The regular filing period runs from July 2 to September 15 or to November 30, depending on the county.[6]

Property tax on commercial property: Nova Scotia and California compared

Feature	Nova Scotia	California
Who values the property	PVSC, a provincial body, every year	The county assessor
Basis of value	Current market value, reassessed annually	Value at purchase or new construction, plus at most 2% a year
Who sets the rate	Each municipality, every year	Capped at 1% plus voter-approved debt
Cap on increases for commercial property	None (the cap is residential only)	Yes, through the 2% annual limit until a sale
Effect of buying	Assessment follows the market regardless of sale	Reassessment to market value, including some entity transfers
Appeal window	31 days from the assessment notice	July 2 to September 15 or November 30

Transfer taxes when you buy

Nova Scotia. Municipalities charge a deed transfer tax on the purchase price. In Halifax Regional Municipality the rate is 1.5%, and the deed must be registered within 10 days of acquiring title.[8] The province sets the maximum municipal rate at 1.5%.[9] Non-residents buying residential property with three dwelling units or fewer also pay the provincial Non-resident Deed Transfer Tax, which rose from 5% to 10% for agreements signed after March 31, 2025.[10] Apartment buildings with four or more units fall outside that tax.

California. Counties, and some cities, charge a documentary transfer tax when a deed is recorded. Rates and exemptions differ, so check with the county recorder before closing.

Depreciation: what you can deduct each year

Land cannot be depreciated in either country, so the split of the purchase price between land and building directly sets the annual deduction.

Canada. Buildings are written off through capital cost allowance (CCA), generally in Class 1 at 4% a year. Non-residential buildings acquired after March 18, 2007 can earn an extra allowance, for a total rate of 6%, or 10% if used to manufacture or process goods, but only if you elect to put the building in a separate class when you file the return for the year you acquire it.[11] Under proposed changes, eligible new purpose-built residential rental projects that begin construction after April 15, 2024 and before 2031, and are available for use before 2036, get an accelerated 10% rate.[11] CCA cannot be used to create or increase a rental loss.[11]

United States. Residential rental property is depreciated over 27.5 years and nonresidential real property, which includes most hotels, shopping centres and offices, over 39 years.[12] Depreciation claimed is partly taxed back when you sell, which we cover in taxes when you sell or refinance a hotel or apartment building.

Incentive programs worth checking

Incentives change often and most depend on when construction starts or when a property is certified. The programs below were current when this article was updated.

• GST/HST rebate on new purpose-built rentals (Canada and Nova Scotia). The federal government rebates 100% of the GST, or the federal part of the HST, on qualifying new purpose-built rental housing. The building needs at least four units each with a private kitchen, bathroom and living area, or at least ten residential units, and at least 90% of the units must be held for long-term rental. Construction must begin after September 13, 2023 and before 2031, and be substantially complete before 2036.[13] Nova Scotia rebates the provincial part of the HST on the same terms, administered by the Canada Revenue Agency.[14]
• Federal historic rehabilitation credit (U.S.). For qualified rehabilitation spending on a certified historic structure, a 20% credit is allowed ratably over five years starting when the building is placed in service. A certified historic structure is one listed in the National Register of Historic Places or certified as contributing to a registered historic district.[15]
• Mills Act contracts (California). Cities and counties can sign contracts with owners of qualified historic buildings who agree to restore and maintain them. The contracts run for at least ten years, renew automatically each year and pass to new owners. The property is then assessed using an income approach, which can lower the property tax.[16]

Managing the tax bill on a commercial property

1. Read every assessment notice

   In Nova Scotia you have 31 days to appeal; in California, check your county’s filing window.

2. Budget the reassessment when you buy in California

   Underwrite the tax at the new assessed value, not the seller’s bill.

3. Document the land and building split

   Use an appraisal at purchase; it sets depreciation and later recapture.

4. Make elections on time

   The separate-class election for the higher Canadian CCA rate is filed with the return for the year of acquisition.

5. Check incentives before starting work

   Rebates and credits depend on start dates, unit counts and certification.

Sources

1. Nova Scotia’s Property Assessment and Tax System — Property Valuation Services Corporation. Checked 2026-10-12.
2. How We Assess Property — Property Valuation Services Corporation. Checked 2026-10-12.
3. Capped Assessment Program (CAP) — Property Valuation Services Corporation. Checked 2026-10-12.
4. Commercial Tax Policy — Halifax Regional Municipality. Checked 2026-10-12.
5. Filing and Withdrawing an Assessment Appeal — Property Valuation Services Corporation. Checked 2026-10-12.
6. California Property Tax: An Overview (Publication 29) — California State Board of Equalization, March 2025. Checked 2026-10-12.
7. Legal Entity Ownership Program (LEOP) — California State Board of Equalization. Checked 2026-10-12.
8. Property tax information — Halifax Regional Municipality. Checked 2026-10-12.
9. Halifax explores raising deed transfer tax to help pay for major projects — CBC News. Checked 2026-10-12.
10. Non-resident Provincial Deed Transfer Tax — Government of Nova Scotia. Checked 2026-10-12.
11. Rental Income (Guide T4036) — Canada Revenue Agency, March 27, 2026. Checked 2026-10-12.
12. Publication 946 (2025), How To Depreciate Property — Internal Revenue Service. Checked 2026-10-12.
13. GST/HST purpose-built rental housing rebate (PBRH rebate) — Canada Revenue Agency, June 21, 2026. Checked 2026-10-12.
14. Notice: Purpose-built Rental Housing Rebate — Nova Scotia Department of Finance and Treasury Board, July 30, 2025. Checked 2026-10-12.
15. Instructions for Form 3468 (2025), Investment Credit — Internal Revenue Service. Checked 2026-10-12.
16. Mills Act Program — California Office of Historic Preservation. Checked 2026-10-12.