BUFFALO, N.Y. -- The Canadian government is proposing implementing an annual 1% tax on the value of non-resident, non-Canadian owned residential real estate considered to be vacant or underused.

Immigration attorney Rosanna Berardi said the concept was to make a very competitive market in large urban areas more accessible to Canadians.

"People were buying properties in the metro areas, in the GTA, Toronto and Vancouver. A lot of them were buying sight unseen, never used them, but it was a safe economy to park money in. So what happened was there were so many of those types of investments made that the price just kept going up and up and up and up," Berardi said.

In response to stakeholder concerns, the government did carve out an exemption for vacation properties in rural areas.

"The problem with Fort Erie and Southern Ontario is it falls into the GTA, the greater Toronto area, so it doesn't look like that rule exception is going to apply," Berardi said.

She said it appears that many Western New Yorkers who own cottages across the border may still be on the hook for the additional tax. Berardi called it "an extra kick in the gut" to many who were not even able to use those properties the past two summers due to COVID-19 restrictions.

"Now to say, okay, well you can come up here and see your properties but you need a PCR test, which is expensive, and we're going to ding you again tax-wise, just not a message that's really warm and fuzzy from our supposed neighbor and best trading partner," she said.

The government is proposing the Underused Housing Tax be effective for the 2022 calendar year, according to the Department of Finance, but Berardi said the proposal is poorly written, confusing and unclear.

"The phones are definitely ringing. This isn't final yet so this is a proposed regulation. It hasn't been presented to the federal cabinet, which is the highest level of government in Canada so we're telling people to sit tight."

Fort Erie Mayor Wayne Redekop said Americans should keep an eye on the proposal for now but believes it's a long way from becoming law. He said roughly 15% of the residential property in the town is owned by Americans and urged people not to start selling those houses and cottages.

Berardi said she is already seeing clients start to sell though. She said right now it's because of the burdensome nature of getting tests to cross the border and general uncertainty about future Canadian COVID-19 restrictions.

Meanwhile, U.S. Rep. Brian Higgins said he believes it more than just an "unfair fine" but is also a violation of the United States-Mexico-Canada Agreement (USMCA).

“We are communicating with the Biden Administration to advocate on behalf of Americans and urge Canada to reject this proposal," he said in a statement.

Higgins, who serves as co-chair of the Northern Border Caucus, said he is continuing to have discussions with the Office of the United States Trade Representative and the Department of the Treasury regarding the proposal.