Halifax sues developer in excess of taxes in Mic Mac Shopping mall sale

The Halifax Regional Municipality is taking a developer to court docket above what it suggests are unpaid taxes on the sale of the Mic Mac Shopping mall, looking for clarity on when businesses will have to pay up.

Halifax filed the lawsuit versus Joseph and Anthony Ramia’s Rank Inc. this July in the Supreme Court of Nova Scotia. It asked for a lawful ruling on whether Rank need to spend deed transfer tax on the transfer of “effective ownership” of the Dartmouth mall’s land.

Every person who purchases residence in Halifax owes the city 1.5 for each cent of the order price tag, which is set out under the Municipal Authorities Act, but Rank received the land in an indirect way where by no deed transformed hands.

The lawful title to the mall land is held by a numbered business — 4239474 Canada Inc. — while the “advantageous fascination” in the house is held by Mic Mac Mall Minimal Partnership, according to Halifax’s software. Home data display Joseph Ramia as president of the numbered enterprise.

Both equally Halifax and Rank mentioned that in September 2021, Rank bought all of the shares in the numbered firm, and all of the minimal companion passions in the Mic Mac Shopping mall partnership.

But the get-togethers disagree on whether or not deed transfer tax applies in this type of offer.

Developer Joe Ramia of Rank Inc. The firm has contested Halifax’s lawsuit, saying deed transfer taxes do not utilize to the Mic Mac Shopping mall deal. (CBC)

Halifax argues that it gave Rank regulate “around equally legal and effective ownership” of the mall house, but the company “refused” to pay out the tax when requested.

In a observe of contest filed Monday by lawyer Robert Grant, Rank stated the sale of people shares did not contain transfer of pursuits in “authentic home,” and there was no deed filed for the duration of this transaction, so the tax is not relevant less than the recent bylaw.

The lawsuit was initial reported by the Halifax Examiner. 

Martin Ward, the law firm representing the municipality, mentioned there is certainly at the moment “uncertainty” all over how the Municipal Govt Act applies to income finished outside the house of a deed.

“Our placement is that the legislation covers all transfers of residence no subject what system you use. And so we are searching for clarification from the court that which is the circumstance,” Ward claimed exterior court Tuesday, soon after an appearance to established upcoming dates.

A white man with glasses stands in a hallway
Martin Ward, a attorney for Halifax, is found in this file photo at Halifax Metropolis Corridor. (CBC)

Ward explained it truly is critical to choose this authorized stage for the reason that some developers have previously been paying deed transfer tax on these kinds of transactions, and some have not.

It’s also unsure precisely how a great deal Rank would owe less than this tax, Ward claimed, because the town does not know how significantly the corporation compensated for the shares and pursuits. 

The Assets Valuation Services Company (PVSC) assessed the approximately 15-hectare mall residence at $89.4 million for 2023, down from $116 million in 2021 when Rank created the offer. If, for case in point, Rank paid $116 million at the time, a 1.5 per cent deed transfer tax would operate out to about $1.7 million.

When questioned if the final result of this case could effects other developers in the metropolis who acquire over home this way, Ward stated “it could.”

Rank wrote that Halifax never ever attempted to acquire deed transfer tax from identical transactions in advance of this. It stated the municipality is employing the problem as a “examination circumstance” to support its goal of collecting taxes on this variety of transaction.

A 1-working day listening to is established for April 2024 prior to Justice Scott Norton.

A drawing of the development is imposed over a Google Earth-type visual of the area, with the mall in blue and various buildings set up around it
An artist’s rendering of the proposed M District close to the Mic Mac Shopping mall property in Dartmouth demonstrates several phases of enhancement. (WM Fares Architects)

Joseph Ramia is preparing a new significant development on the mall lands, termed the M District, which is moving forward alongside master neighbourhood organizing for the place which would involve any improvements to land-use bylaws, parks or transit hubs.

The current plan is a phased venture that would build the parking loads and Chapters constructing into 7 30- to 36-storey household towers with about 1,660 apartments and five residential properties nine storeys high with floor-ground retail and about 240 residences.

There would also be a 12-storey retirement facility made up of about 400 units and an addition of 6 to 14 tales to the west deal with of the mall that would consist of parking, business office and enjoyment area. Underground parking is also prepared.

The second section of general public engagement on the project is slated for this fall, when draft organizing files will be shared for remark and suggestions.