A CLA member brought this new tax item to our attention and thought it may be beneficial to share with the lake community. If you have any questions or concerns about your property(s), please speak directly with your accountant. CLA is providing this information as a community service only.
The underused housing tax – A new compliance requirement for many owners of Canadian residential property
The federal Underused Housing Tax Act (UHTA) became effective January 1, 2022. As a result, a significant number of Canadian residential property owners will be required to file their first annual underused housing tax (UHT) information return in respect of their property by May 1, 2023, or face minimum penalties of $5,000 for individuals or $10,000 for corporations – even if no tax is payable.
The 2021 and 2022 federal budgets described the UHT as a 1% annual tax on the value of vacant or underused Canadian residential property held by certain non-Canadian owners. UHT was introduced with the stated aim of helping to address the housing crisis in Canada and make home ownership more affordable for Canadian citizens and permanent residents. However, unless the owner is an “excluded owner,” various Canadian owners will have a filing obligation, including corporations that are not publicly traded and certain trustees and partners – even in situations when the UHT is not payable. Accordingly, both Canadians and non-Canadians will be impacted.
For details see the government website: Underused Housing Tax – Canada.ca