The federal government has made an eleventh-hour announcement to extend the deadline to file Underused Housing Tax returns.
Ottawa today announced that homeowners who are required to file a return under the new Underused Housing Tax for the 2022 calendar year will now have until April 30th, 2024, to comply without facing additional penalties or interest payments. Returns filed after that deadline will be subject to penalties and interest.
The UHT is a 1 per cent tax on the ‘specified value’ of a vacant or ‘underused’ residential property. The levy applies to properties owned in whole or in part by non-resident, non-Canadian citizens, but a wide swath of ‘affected owners’—including many Canadian citizens and permanent residents—must also file an annual UHT return with the Canada Revenue Agency.
As we noted in a previous blog, the definition of affected owners includes:
- Canadian-controlled private corporations that own residential property, the exception being some specified Canadian corporations
- Corporations incorporated outside of Canada
- A Canadian corporation with no share capital
- Individuals engaged in a business partnership where the partners hold title to one or more residential properties
- Trusts (including those held by Canadian citizens or permanent residents) that hold residential property. In this case, the trustee(s) are considered affected owner(s) who must complete the annual UHT declaration and pay applicable taxes. Importantly, unless all beneficiaries of a trust are considered excluded owners, UHT on the property may be owed
Despite the extension, it’s best to work with your Chartered Professional Accountant to comply with the UHT as soon as possible and make any payments as required. That’s especially true for business owners and high net-worth individuals, who may or may not hold properties in a trust or corporation, and could be required to report under the new tax regime.
Avoid unnecessary penalties and interest charges. Contact a member of the KRP team today to understand your potential UHT reporting obligations.
Armando Iannuzzi, Co-Managing Partner