The Underused Housing Tax (Revised)
Government of Canada Announces Relief for Property Owners Affected by the Underused Housing Tax
In a recent development that has relieved numerous residential property owners across Canada, the Government of Canada has officially announced an extension for filing Underused Housing Tax (UHT) returns. Property owners subject to the UHT now have until April 30, 2024, to file their returns for the 2022 calendar year. This significant extension allows affected property owners to file without incurring penalties or interest charges.
Introduced on January 1, 2022, the Underused Housing Tax is a federal tax measure designed to address the issue of vacant or underutilized residential properties in Canada. The tax is set at an annual rate of 1% on the value of the applicable properties. Initially targeting foreign nationals who own residential properties in Canada, the UHT has a broader scope than initially perceived, encompassing certain Canadian entities as well.
Primarily, the UHT impacts foreign owners of Canadian residential properties, a move seen as part of the government's strategy to ensure more housing availability for Canadian residents. However, under specific circumstances, this tax also extends to certain Canadian owners, including partners in partnerships, trustees, and corporations.
The deadline extension is a response to feedback from property owners and tax professionals highlighting the need for more time to understand and comply with the new tax requirements. This additional time frame will aid in smoother and more comprehensive compliance.
The government's latest news release outlines that the UHT was implemented to manage and utilize housing property more effectively, particularly in urban areas where housing shortages are most acute. The tax encourages property owners to either make their vacant properties available for rent or sell them, thereby increasing the housing supply.
The government has recommended seeking professional advice for property owners who are still determining their obligations under the UHT. Detailed information on the UHT, including guidelines on who needs to file, how the tax is calculated, and the process of filing, is available on the government's official website.
The extension to April 2024 is a welcome relief for many, providing additional time for property owners to navigate this new tax landscape. As the deadline approaches, property owners are encouraged to familiarize themselves with the requirements of the UHT and take the necessary steps to ensure compliance.
For more information - contact your accountant to find out if the UHT return is needed. For more information on buying and/or selling real estate! We’d love to help.
Source: https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax.html