Tourism Property Tax Interest Relief Program

Tourism operators owing interest on 2021 property tax payments may apply for Tourism Property Tax Relief, provided the applicant’s property is part of their tourism operation. The existing Tourist Interest Relief Program is now expanded to include outstanding unsubsidized interest on property taxes for the period June 1- December 31, 2021. Operators with a monthly revenue reduction of 30% or greater who have applied to the Canada Emergency Rent Subsidy (CERS) may be eligible, with overall eligibility assessment calculated after the end of year. If you did not apply for CERS, you are not eligible for this program.

Interest will continue to accrue on the applicant’s account until December 31, 2021. Tourism PEI will process approved payments to the eligible property tax accounts after December 31, 2021.

Unsubsidized interest is equal to the total interest on eligible properties during the June 1, 2021 to December 31, 2021 period, reduced by the percentage subsidized by CERS.

Once an application has received approval for relief under this program, claims will then be required to be submitted monthly, and processed each month up to December 31, 2021. The program will not exceed seven months, and no claims will be processed for months subsequent to December 2021.

Use the online form below to apply for relief of interest on property taxes and, if approved, tourism operators will be required to submit on a monthly basis the required documentation and financial information from June 2021 to December 2021.

General Eligibility Criteria

Eligible applicants must be operating within one of the following sectors:

• Licensed tourism accommodations used primarily for business activity (e.g. hotel, motel, bed and breakfast, inn, resort, cottage operations, campgrounds);
• Food and beverage service (e.g. restaurant, bar, brewery);
• Local artisans and artists (e.g. pottery, artwork);
• Locally-owned retail and gift shops that cater primarily to Tourism;
• Attractions (e.g. museum);
• Tourism service/experience providers;
• Event companies;
• Adventure (e.g. kayaking, amusement park, golf); and/or
• Tour operators.

Business requirements

For-profit corporations, partnerships and sole proprietorships operating within one of the above-noted sectors are eligible for the program, provided that the physical tourism operation and head office are both located on Prince Edward Island. Ineligible entities include the following:

• Operations that are currently, or have been in the past, in the process of receivership as per Canada’s Bankruptcy and Insolvency Act;
• Businesses and/or shareholders/partners listed on the Provincial Central Default Registry;
• Non-Canadian or publicly traded companies or company owned by the same; and
• Corporate operations of a franchise network with establishments located outside of PEI.

Eligible Interest

Relief of interest on property taxes is only available on eligible properties between the period of June 2021 and December 31st, 2021. Eligible properties are properties that are used in the applicant’s tourism operations.

Seasonal Operations: Eligibility for Months when the Operation is Not Active

Finance PEI and Tourism PEI recognize that many of our Tourism businesses earn the majority of their annual revenues from May to September. The amount earned during the short peak tourist season is sufficient to cover expenses of the operation year round. As such, operations continue to be eligible for interest relief for those months where revenues are zero, even if there was no revenue recorded for that month in the previous year. For new accommodations or businesses where historical revenues are not available, eligibility will be determined by comparing monthly occupancy rates to either historical tourism averages or the specific properties tourism occupancy percentage. Please note, as per below under Licensing requirements: In order to be eligible, Tourism Accommodations must hold a valid license under the Tourism Industry Act, acquired prior to April 1, 2020.

Seasonal Operations: Eligibility for Months when the Operation is Not Active

Finance PEI and Tourism PEI recognize that many of our Tourism businesses earn the majority of their annual revenues from May to September. The amount earned during the short peak tourist season is sufficient to cover expenses of the operation year round. As such, operations continue to be eligible for interest relief for those months where revenues are zero, even if there was no revenue recorded for that month in the previous year, provided the company has not already reached the maximum interest relief for which they are eligible, as described above. For new accommodations or businesses where historical revenues are not available, eligibility will be determined by comparing monthly occupancy rates to either historical tourism averages or the specific properties tourism occupancy percentage. Please note, as per below under Licensing requirements: In order to be eligible, Tourism Accommodations must hold a valid license under the Tourism Industry Act, acquired prior to April 1, 2020. 

Real estate holding companies

A real estate holding company may be eligible for interest relief under this program if the following criteria have been met:

• The company that holds the capital assets and associated debt rents space to a related company operating a tourism-related enterprise; and 
• Both companies are controlled by the same ownership or “immediate family members” (for the purpose of this program, immediate family members include parents, spouse, or children).

If the above-noted criteria and all other program criteria have been met, ONE of the two companies, as elected by the companies, will be eligible for interest relief under the program. For the purpose of monthly reporting to determine eligibility for a particular month, revenues of the operating company will be considered.

Further Eligibility Criteria for Accommodations

Licensing requirements

This program applies to Tourism Accommodations (Establishments) as defined under the Tourism Industry Act and therefore applies only to establishments that are rented for periods of less than one month at a time in accordance with S. 1.(i) of the Act. In order to be eligible, Tourism Accommodations must hold a valid license under the Tourism Industry Act, acquired prior to April 1, 2020 to be verified by Tourism PEI. 

Properties used for both long term and short term rentals

Long term rental activities are not eligible for interest relief under this program. In situations where a property is used to earn income from both long term and short term rentals, and is not the private residence of the owner, the operator is only eligible to receive interest relief for those months that the establishment was used for tourism (short term rental) purposes. As such, a determination must be made on a monthly basis as to what percentage of interest will be deemed eligible and may be calculated based on the ratio of nightly units vs long-term rental units for the applicable month. The intent of the program is to provide interest relief on tourism operations, exclusive of long-term rentals.

What is the process to apply?

Eligible tourism operators on PEI will be required to submit an online application and the required supporting documentation demonstrating either:

• a minimum 30% decrease in tourism related revenues compared to the same month for 2019 vs 2021; or
• that the operation had no tourism revenue for that month; and
• supporting documentation demonstrating they have applied for the Canada Emergency Rent Subsidy (CERS).

Information to be provided:

• Completed online application for “Tourism Property Tax Interest Relief” from Finance PEI and Tourism PEI. You must:
  • State if there has been a negative impact in monthly PEI-generated tourism revenue in either: 
    • a) a minimum 30% decrease in tourism related revenues from PEI operations compared to the same month for 2019 vs 2021; or
    • b) no tourism revenue for the month.
  • Upload the following documents:
    • Proof of CERS application including subsidy rates in effect for the June 1, 2021-December 31, 2021 period (approval or denial letter - sample CERS letter); and
    • Copy of the first page of property tax bills (sample bill) for properties used in the applicant’s tourism operation on which they are seeking property tax interest relief, along with a certification that the properties are used in the applicant’s tourism operation.
  • Provide authorization to Finance PEI to access your property tax information.

What is the process to request subsequent relief? 

After your initial application and approval, for each subsequent month you will need to provide:

• Your initial Property Tax Interest Relief Confirmation Number (ie 3683-1234567);
• Subsequent financial information for the month applying;
• Comparative income for the month you are applying for (ie July 2019 and July 2021); and
• CERS subsidy rate for the month you are applying for (ie July 2021).

Business administrators/operators who provide false or misleading information to obtain access to this program will be subject to full repayment with interest, plus other penalties as deemed appropriate by the agency and authorities.

What is the payment process?

Interest will continue to accrue on the applicant’s account until December 31, 2021. After December 31, 2021 all approved applicants will be eligible for Tourism PEI to process payments directly onto the eligible property tax accounts to reduce the outstanding eligible interest.

Contact Information

For information about the tax interest relief for tourism operators, contact tptir@gov.pe.ca.