Could Prince Edward Island be on the right track when it comes to ownership that “comes from away”? The Financial Post featured what non-Islander buyers face when they buy significant property in Prince Edward Island.
Canada’s tiniest province is an island unto itself when it comes to letting foreigners control the property market. Prince Edward Islanders refer to those people as “come from away” but it’s not just overseas investors that are restricted in how many acres they can buy or how much shoreline they can own, the rules apply to Canadians outside of P.E.I. too.
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.
“Foreign” ownership has long been a concern for Canada’s smallest province. You could be a buyer from Ontario, the US, or China. These restrictions apply equally to all those buyers “from away”.
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.
So this stipulation doesn’t restrict foreign buyers per se. It actually encourages those who buy to become an Islander.
“If you are coming here to move here and be a resident of P.E.I. and be a member of the community, even though you are a non-resident right now, there is a good strong chance that the application will go through. If you are a corporate farmer from Ontario and you realize that you can buy farmland in P.E.I. for $2,500 an acre, whereas it would cost you $25,000 in Ontario and you simply want 1,000 acres to farm from afar, you’ve got a problem,” MacKenzie said.
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.
It’s a very interesting situation in P.E.I. since it’s so small and empty homes would be very noticeable on the Island. Would something like this work in Vancouver? I’m not sure, but certainly we can adapt parts of the ideas and make it work. Maybe it would encourage more long time residents and less real estate speculation and less empty homes. It’s worth a discussion.