The value of a waterfront home outside Antigonish, N.S., is in dispute after a Mi'kmaq burial site and artifacts were discovered on the property — ultimately reducing its assessed value to just $1.

The homeowner argues the discovery of the artifacts severely limits his ability to sell the property in the future. But the group that assesses properties in the province argues the unprecedented $1 assessment is well below market value and means the property owners wouldn't pay any taxes to the municipality.

A ground and polished green-banded slate celt — a highly prized implement used by the Mi'kmaq for ceremonial purposes. (Contributed)

"It's very rare," said Lloyd MacLeod, senior commercial manager for Property Valuation Services Corporation, the not-for-profit organization responsible for assessing all property in Nova Scotia.

"I don't recall any home reduced to zero that was a home that somebody was actually living in."

Cutting an assessed value so dramatically means the property owner will no longer owe any taxes to the municipality, he says.

In 2013, owners Mike MacDonald and Jayne Chisholm were building a home on a lot on Seabright Road.

At that time, they discovered a ground and polished, green-banded slate celt — a highly prized axe or wood-working tool with a hatchet-like cutting edge — used by the Mi'kmaq for ceremonial purposes. The object was found in a 500-year-old pit lined with woven birchbark.

MacDonald reported the find to the nearby Paq'tnkek First Nation, which conducted archaeological digs that uncovered another even older probable burial site estimated at between 2,000 and 4,000 years old.

Despite the discoveries, the band did not object to construction continuing. The artifacts were re-interred elsewhere.

Discovery 'severely limits' property

The artifact finds originally had no impact on the property's assessed value, which PVSC set at $365,000 for 2014.

The assessment was first reduced to $253,000 after MacDonald contacted assessors. He subsequently appealed and in August 2014 the Nova Scotia Assessment Appeal tribunal reduced the value from $253,000 to $1.

"The location of artifacts severely limits the use of the property and could adversely affect resale value," the tribunal found.

Even though the Paq'tnkek First Nation allowed the home to be built, the tribunal stressed the Mi'kmaq connection meant "the future status of the property is unclear."

Now that $1 assessment ruling is being challenged by PVSC.

"It would be precedent–setting … to not challenge the value being set at zero," MacLeod said.

"In that situation, of course, the homeowner would not be paying any taxes to the municipality. To reduce it to zero is quite significant and below what we feel the market value would be."

Owner weighs in

The Nova Scotia Utility and Review Board will hear appeal of the $1 assessment in September. The case is likely to set a precedent, whatever the outcome.

In documents filed earlier this month with the review board, MacDonald argues assessors with PVSC have made no attempt to estimate the impact of the artifacts on his property.

"The First Nations' strong interest in and claims on my property raises serious questions about my ability to guarantee clear title to anyone interested in purchasing it," MacDonald wrote.

"The finding of artifacts on my property makes the First Nations claims more immediate."

MacDonald declined comment when reached by CBC News..

Stewardship deserves 'tax relief'

Heather MacLeod-Leslie, the archaeologist on the Seabright Road property, praised MacDonald.

"Mike has done the ethical, the humane and the responsible thing in recognizing the importance of this," she said. "And that kindness has been returned in the co-operative relationship with the Mi'kmaq."

In her view, his stewardship should be rewarded with tax relief.

MacDonald may not be the only property owner facing the issue. MacLeod-Leslie said there are 900 Mi'kmaq archaeological sites in Nova Scotia and many burial sites.

"All in all, the whole situation between property owner and Mi'kmaq and scientists has been a very positive and mutually respectful experience, by my account."

Paq'tnkek First Nation Chief Paul Prosper declined comment on Tuesday.