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National

U.S. lawmakers urge Canada to exempt Americans from tax

Eleven legislators from six states say Underused Housing Tax could negatively affect U.S./Canada relations

From left: U.S. representatives Claudia Tenney (left), Brian Higgins (right) with Secretary of State Antony Blinken
From left: U.S. representatives Claudia Tenney (left), Brian Higgins (right) with Secretary of State Antony Blinken (Getty)

A bipartisan group of U.S. legislators is pushing to have Americans exempt from Canada’s new Underused Housing Tax.

In a sharply worded letter to Secretary of State Antony Blinken, 11 Republicans and Democrats from six states said the 1 percent tax on ownership of vacant or underused housing in Canada — which usually applies to nonresident, non-Canadian owners — “is unfairly impacting Americans who own property in Canada and putting the strong bond between our countries in jeopardy.”

The tax — which affects any property not occupied for six months of the year, according to Mansion Global — is being collected for the first time this year, though problems have arisen over issues such as obtaining a tax ID number, which has led to Canada postponing fines for late payment of the tax until Oct. 31.

Exemptions already exist for people who occupy a property for at least 180 days in a calendar year, for periods of at least 30 days, Mansion Global said. 

The letter was signed by U.S. Reps. Claudia Tenney, Brian Higgins, Joe Courtney (CT-2), Nicholas Langworthy (NY-23), Mike Kelly (PA-16), Andy Kim (NJ-03), Brian Mast (FL-21), Paul Tonko (NY-20), Jennifer Wexton (VA-10), Nancy Mace (SC-01) and Max Miller (OH-07).

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“Many of my constituents have owned small homes or other properties in Canada for generations, and proposing this tax on them is unfair and unjust,” Tenney said. “Today, I join my colleagues on both sides of the aisle in urging the Secretary of State to work with the Canadian government to rectify this misguided policy.”

The tax, the letter noted, was passed to curtail foreign real estate speculation, but American citizens were being unfairly impacted.

“The Government of Canada has provided exemptions, but many properties do not qualify based on their location,” the letter says. “Additionally, the methods to submit documentation to prove exemption to the Canada Revenue Agency are unclear.”

Legislators are calling for a solution to be reached before the Oct. 31 deadline.

— Ted Glanzer

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CanadaInternational Real EstateTaxes