Prince Edward Island as a province requires foreign property buyers to check in (article in Financial Post)

PEI(Preamble by CityHallWatch: This is an interesting article in National Post that shows what a provincial government CAN do if the desire is there. But no change will happen in British Columbia unless it comes from citizens who demand it. Everyone else is on the gravy train. Where is the leadership of municipalities like Vancouver? We could look at the core issue as supply versus demand. There is a finite supply of property, but if our governments and leaders force locals to compete with money laundering and unrestricted money flows putting locals in competition with the richest in the world, the demand for local property is effectively infinite. What will Mayor and Council do? Pleading ignorance, failing to collect data, and failing to take action — these are conscious policy choices by our leaders. Below are just a few excerpts of the article. See link for full text.)

Prince Edward Island, the one place in Canada where foreign property buyers must check in
(by Garry Marr, Financial Post, 15-Mar-2015)
http://www.nationalpost.com/Prince+Edward+Island+place+Canada+where+foreign+property+buyers+must+check/11059323/story.html

Excerpts.

  • It’s a property most Canadians can only dream about. At $899,000, in today’s market it seems downright affordable, especially when you hear it’s a 22-acre lot with 1,250 square feet of oceanfront. … Because of its size, the listing from broker Mary Jane Webster of Re/Max Charlottetown for the property in Tracadie, on the north shore of Prince Edward Island, ultimately falls under the province’s strict foreign ownership limits.
  • “As a business person I’m probably against it, but as an Islander I’m for it,” said Webster about non-resident rules that control land sales for larger properties and probably drive down prices.
  • … P.E.I. has long worried about the impact of absentee landowners. But unlike the rest of the country, which is so consumed with the issue of foreign ownership that even Canada’s top housing agency has gotten involved, P.E.I. identified those people and enacted laws to prevent them from taking over ages ago.

  • “Years ago, the Americans and foreigners were just buying up the island like crazy. All the shoreline, farmland,” said Wayne Ellis, president of the Prince Edward Island Real Estate Association. “It doesn’t matter where you’re from, Canadian, American or from the moon, a non-resident can own just five acres of land or 165 feet of shoreline. Listen, this is a small province, if there’s no rules, it could be bought out.”
  • If you want a parcel of land over those five-acre or 165-foot shoreline limits, you have to make an application to the Island Regulator and Appeals Commission, which makes a recommendation to the provincial cabinet, which ultimately rules on exceptions.
  • … Ellis says Islanders already can’t compete with foreign buyers for land, so restrictions are trying keep property in local lands. Substitute empty lots for empty condos and Chinese buyers for Americans and out-of-province bidders – and you could be talking about Vancouver and Toronto and not beautiful coastline 20 minutes by car from Charlottetown.
  • “Rules on foreign ownership are the exception more than the norm. They have some rules like that in Australia,” said Bob Dugan, chief economist with Canada Mortgage and Housing Corp., about the island’s laws that are dealing with a sea of Asian buyers.
  • … P.E.I., equally, wants foreign investors and has a program to encourage them to come to the island, but it wants them to buy and become residents.
  • … In a normal year P.E.I. gets 100 applications for individuals that exceed the 50-acre or 165-feet of shoreline limits, and about 50 applications from corporations. There are a number of considerations before an appeal will be considered. One of the stipulations is that no more than 30 per cent of a community be made up of non-islanders.
  • …Tracking out-of-province buyers might be a problem elsewhere in Canada but P.E.I. keeps a handle on the situation through a tax structure that effectively doubles property taxes for non-residents, creating an incentive for people to prove they are living on the island and meet the minimum stay of 183 days.
  • “What this does is it gives the province a database on a particular parcel of land,” said MacKenzie.
  • How strongly does P.E.I. feel about the issue? When the Constitution was brought home and the Charter of Rights created in 1982, P.E.I., along with Saskatchewan, demanded that a section that included the right to hold property be taken out. Saskatchewan is one of several Canadian provinces that restricts farm land ownership by non-Canadians.
  • …  Legal challenges to P.E.I.’s double taxation of non-residents have all failed, said Ghiz.
  • Edward MacDonald, a University of Prince Edward Island professor, said while the history of local ownership is strong in P.E.I., the issue came to the forefront when Cabinet got hold of a map that showed the amount of land owned by non-islanders.
  • … “If you didn’t have the restriction it would be open season and prices would probably be even higher,” he said.

******

More reading, from CityHallWatch

Island Regulator and Appeals Commission (Prince Edward Island) – http://www.irac.pe.ca/

The Commission is an independent quasi-judicial tribunal operating under the authority of the Island Regulatory and Appeals Commission Act. The Commission administers a number of provincial statutes dealing with economic regulation and hears appeals under provincial planning, tax and residential rental property legislation.

Here is the link for FAQs on the Lands Protection Act. For example:

Question 6…Who must make an application?

Answer:

A non-resident person or corporation, or a resident corporation must make application if the person or corporation will have an aggregate land holding

  • in excess of 5 acres, or
  • having a shore frontage in excess of 165 feet.

PEI

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