Underused Housing Tax in Canada: What You Need to Know for 2023
Are you a non-resident of Canada who owns vacant or underused housing in the country? If so, you may be subject to a new annual tax called the Underused Housing Tax (UHT). But even if you're a Canadian citizen, resident, or corporation, you may still need to file a UHT return for each of your residential properties. Here's what you need to know about the UHT for 2023.
What is the Underused Housing Tax?
The UHT is a new tax that was introduced in Canada on January 1, 2022. Its aim is to encourage non-residents to make their vacant or underused housing available for rent or sale, which could help alleviate Canada's housing affordability crisis. However, there are situations where Canadian citizens, residents, and corporations will also need to file UHT returns.
Who Needs to File UHT Returns?
If your name or your business's name is on the land title of a residential property in Canada, you may need to file a UHT return. This applies to non-residents as well as Canadians. The UHT return is a 6-page document that asks for information such as the property's location, type, and ownership structure, as well as its occupancy and use during the year.
When Are UHT Returns Due?
UHT returns for the 2022 calendar year were due by April 30, 2023. However, the Canadian government has recently announced that it will waive penalties and interest for late-filed returns and late-paid UHT payable for the 2022 calendar year, provided that the return is filed or the UHT is paid by October 31, 2023.
What Happens If You Don't File a UHT Return?
Failing to file a UHT return on time can result in penalties. For individuals, the penalty for late filing is $5,000, while for corporations, it's $10,000. If you receive a late-filing penalty, you'll also be charged interest on any outstanding UHT payable.
The Underused Housing Tax is a new annual tax on the ownership of vacant or underused housing in Canada. While it's primarily aimed at non-residents, Canadians may also be required to file UHT returns for their residential properties. If you're subject to the UHT, it's important to file your return on time to avoid penalties and interest charges.
You can find more information on the Underused Housing Tax in Canada at https://www.taxtips.ca/real-estate/canada-underused-housing-tax.htm and on the official Government of Canada website at https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax.html.
Remember, if you're subject to the UHT, it's important to file your return on time to avoid penalties and interest charges. And the deadline for filing UHT returns for the 2022 calendar year has been extended to October 31, 2023.
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