Underused Housing Tax (UHT)

Warning!! If you own a Canadian residential property, you might be required to file the Underused Housing Tax (UHT) before October 31th, 2023.

The impact of this brand new Underused Housing Tax is a lot broader than most Canadians have imagined. The legislation is quite long and complex; I’m writing this blog to specifically bring attention to affected owners who might need to file this return. If you are on the legal title of a Canadian residential property on December 31, 2022, and if you are one of the following described below, you need to file the UHT by October 31st, 2023. Minimum $5,000 penalty will be imposed on individuals and $10,000 on all other type of owners including corporations for late filing or failure to file.

Affected Owners:

  • Individuals who are not Canadian citizens or permanent residents of Canada: such as foreign workers, international students, and foreigners
  • Canadian controlled private corporations (CCPCs) and other privately held Canadian corporations: most of the corporations in Canada are under this category
  • Foreign corporations: incorporated outside of Canada
  • Individuals who own residential property as a trustee of a trust(other than as the personal representative of a deceased individual)
  • Individuals who own residential property as a partner of a partnership

If you have a holding company or any corporation that owns a residential property in Canada, you are required to file the UHT. In most cases, there won’t be any tax owing.

Examples of residential property:

  • detached houses
  • semi-detached houses
  • duplexes and triplexes
  • cottages, cabins and chalets
  • townhouses
  • condominium units

Examples of property that are not residential property:

  • buildings with 4 or more units
  • buildings that are primarily (50% or more) used for retail or offices
  • mobile homes, travel trailers, motor homes and camping trailers
  • hotels, motels, inns and bed and breakfasts

For more information regarding UHT, please click here.

As the deadline is fast approaching, if you are not sure whether you’re required to file the UHT, please take the following actions:

  1. Notify Streamline Accounting Professional Corporation by phone or email right away, and we will help you assess your situation and determine your filing requirement.
  2. If you are required to file, and you are a corporation, please apply for the RU number. Please click here for how to get a RU or we will help you if you are a current client with Streamline Accounting PC.
  3. We will provide you with a checklist to help you gather documents and information that are required to file the UHT.

If you have any questions, please reach out and book an appointment with our team.

UPDATE:

UHT Filing Required if you are on title to someone(parent)’s home or guarantee someone(child)’s mortgage

The deadline for submitting the Underused Housing Tax (UHT) is fast approaching on October 31, 2023. If you are listed as a co-owner of someone else’s home (including your parents’) or have co-signed for someone else’s mortgage (including your child’s), it is imperative that you complete and submit your UHT application before the looming deadline of 10/31/2023. I had been hopeful that the Canada Revenue Agency (CRA) would furnish us with more details on this matter, given its far-reaching implications; however, as of today, no updates have been provided by the CRA. It is worth noting that failing to meet the filing deadline can result in a penalty of $5,000. In my personal view, to ensure compliance and avoid any penalties, it would be prudent to complete your UHT filing by the end of this month.

Below is a LinkedIn article posted by Hugh Neilson, FCPA, FCA, TEP, a well-known Canadian tax expert. I think he has explained the situation very well. If this rule impacts you, please contact our office immediately.