New this tax season is the Underused Housing Tax (UHT). This is a Federal Canada wide new tax and declaration form. It came into effect on January 1, 2022. But more information has now been provided by Canada Revenue Agency and the form is now available.
What is it; This is a 1% annual tax on the greater of the assessed value or FMV of non-resident, non-Canadian owned residential real estate that's considered to be vacant or underused.
Why it’s important; Unless you are an excluded owner, you must still file an annual return regardless of whether you will have to pay any tax or not. And some Canadian owners will be impacted like Canadian Controlled Private Corporations (CCPCs) and trusts (if you own a cottage in Canada via a trust you should be paying attention).
When; The Annual declaration Form UHT-2900 is required and due by April 30th, 2023.
How; You must have a valid Canada Revenue Agency identifier number to file your UHT-2900 return. For example, a SIN, business number or individual tax number in Canada. Corporations must apply for an Underused Housing Tax (RU) program account identifier code to file the return.
Penalties are STEEP for not filing. If you do not file your UHT return for a residential property for a calendar year by April 30 of the following calendar year, you have to pay a penalty that is at least $5,000 for failure to file the declaration for individuals and $10,000 for failure to file for corporations.
If you are unsure if this impacts you or if you require assistance with applying for an Individual Tax Number (ITN) in Canada and/or need assistance with this new filing requirement, please contact me directly.
Link to Canada Revenue Agency for the UHT: Underused Housing Tax - Canada.ca
For further information on UHT and for all you TAX questions please connect with the author:
Sandra Dacosta, CPA - Chartered Professional Accountant - Tel: 1 (416) 799-6165 - 2489 Bloor Street W, Suite 108 - Toronto, On M6S1R6 - Info@sdacosta.com
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