Underused Housing Tax Returns – Extended Deadline (April 30, 2024)
Please find attached and below additional information related to the Underused Housing Tax. All required returns for the 2022 calendar year must be filed on or before April 30, 2024 or significant penalties may apply. This extended deadline was announced by the CRA on October 31, 2023 which was the original extended deadline. If you are a Canadian citizen or permanent resident (except in capacity as a partner or trustee), no action is required on your part. Anyone else that owns residential property, including individuals that own the property as a partner or trustee and including corporations, may have a filing requirement.
If you require assistance with a required filing and if we have not already coordinated with you, please contact us immediately to discuss the requirements further.
The Government of Canada implemented the Underused Housing Tax (UHT) which will impact certain residential property owners as of December 31, 2022.
A residential property owner who is not classified as an “Excluded Owner” must normally file the UHT return by April 30 of the following year. However, for the 2022 calendar years, no penalties will apply provided that the return is filed by April 30, 2024. Certain property owners may be required to pay an annual 1% tax on the Taxable Value or the Fair Market Value of the vacant or underused housing.
Excluded Owners include Canadian citizens and permanent residents, so most individuals will not need to file a UHT return. However, all private corporations, partnerships and trusts (even those owned by Canadian citizens) who own residential property will be required to file a UHT return annually, even if they are exempt from the UHT.
Failure to file a UHT return has significant penalties, starting at $5,000 for individuals and $10,000 for corporations. Further, failure to file could lead to the UHT being payable, even if an exemption should have applied.
UHT - Detailed Newsletter Article - Face1