PEI Property Purchase by a Non-resident
There are some things you should know in preparing to purchase a property on Prince Edward Island. Some definitions are a good place to start.
Non-resident – An individual who resides on PEI for less than 181 days out of the calendar year, and does not declare PEI, as their place of residence, for income tax purposes.
IRAC (Island Regulatory and Appeals Commission – The Commission is responsible for the general administration of the PEI Lands Protection Act. This is the government body which oversees and regulates the purchase and ownership of PEI property by non-residents and corporations.
I will give a snapshot of the regulations below. This is by no means a comprehensive overview of the rules, as they apply to non-residents. Contact me for more definitive information.
Any non-resident can purchase, up to five acres of property (with a limit of 165’ of shore frontage) with no restriction, providing they do not own any other property on PEI. If there are to be two individuals on the deed, the allowances can be combined. So a husband and wife can purchase up to 10 acres and up to 330’ of shore frontage. Every person added to the deed increases these limits. Each person on the deed has to be at least 18 years of age.
In the event a property exceeds the above limitations, it is still possible to make the purchase. The necessary steps are, to make application to IRAC, requesting permission to exceed the limits.
There is a fee of $500, or 1% of the purchase price (whichever is greater) and there is GST tax of 5% on this fee. In most cases this permission is granted, but usually with some restrictions. A common restriction, which is important, is a “non-development clause”. A “non-development clause”, means the property cannot be subdivided, for a period of 10 years, from the point in time a request is made, for the restriction to be removed. There can be other restrictions, depending on the property location, or the current use and potential uses of the property. This is an area, where a good Realtor is most important. Advice at this point can be very beneficial, to ensure your future goals can be attained.
Please contact me, so I can help you, in the purchase, your PEI property.
Kelvin MacInnis
Century 21 Colonial Realty
Montague, PE
C0A 1R0
Work 902-838-2221
Fax 902-838-2441
Cell 902-969-3001
Email: kelvin@pei.sympatico.ca
Web: www.century21.ca/kelvin.macinnis
Web: www.easternpei.com