Higgins calls on Biden to object to 'underused housing tax' imposed on US residents owning property in Canada

Congressman says new tax is both 'offensive & a violation of binational agreements'

Congressman Brian Higgins is calling on the Biden administration to address Canada’s underused housing tax in upcoming discussions with the government of Canada.

His team said, “The new 1% tax on “vacant or underused housing” owned by non-resident, non-Canadians is hitting Americans, many of whom have contributed to Canada’s economy and owned cottages in Canada and for generations, especially hard.”

In a letter to U.S. Secretary of State Antony Blinken, Higgins wrote, “At a time when encouraging cross-border travel and economic activity should be prioritized as both countries recover from the COVID-19 pandemic, this is an unnecessary burden and bad faith action by the Government of Canada, which violates the United States-Mexico-Canada Agreement (USMCA) as well as longstanding tax treaties. In your upcoming conversations with the Government of Canada, I request that objecting to this tax is a high priority.”

Higgins’ team said he has heard from more than 200 U.S. residents upset about the new tax, including over 165 who completed an online survey and dozens more who called and wrote to his office. Of the survey respondents, over 80% live in Western New York, about 10% live in Florida, and others live across the U.S. (including the states of South Carolina, Ohio, Virginia, Georgia, Pennsylvania, California and Colorado). The majority own property in Fort Erie, Crystal Beach, Port Colborne and Ridgeway, in the province of Ontario. Many have been property owners in Canada for decades, with 42% of respondents having property in Canada for between 20 and 49 years, and 28% having their Canadian property for over 50 years.

In addition to the cost associated with the tax, many have expressed frustration to Higgins about the “lack of information, clarity and notification of the tax” by the government of Canada. The tax forms are due in Canada by April 30, but owners must first file to receive a tax identifier number. Failure to pay the tax comes with a minimum penalty of $5,000.

Higgins has objected to the underused housing tax since it was first proposed in Canada’s 2021 budget, voicing opposition with the United States trade representative, the U.S. Department of the Treasury, and Canada’s ambassador to the United States.

President Joe Biden has announced plans to visit Canada for meetings with Prime Minister Justin Trudeau and their administrations in March.

Higgins serves on the House of Representatives Ways and Means Committee, which oversees U.S. tax policy, and the Ways and Means subcommittee on trade, which has oversight of trade agreements like the USMCA. Higgins’ Western New York district, which includes the cities of Buffalo and Niagara Falls, borders southern Ontario. Higgins is co-chair of the Canada-U.S. Interparliamentary Group and the Northern Border Caucus.