Do you (or your company) own a residential property in Canada?
The newly introduced Underused Housing Tax (UHT) imposes a 1% annual tax on the value of residential real estate considered to be vacant or underused that is owned on December 31 of each year. While the tax only applies when the property is owned directly or indirectly by non-Canadians, the scope of filing requirements extends to many Canadian corporations and individuals, including CCPCs, trustees of a trust and partners of a partnership.
The first filings and taxes are due by May 1, 2023. Penalties for failure to file the return (even where no tax is payable) start at $5,000 for individuals and $10,000 for corporations.
There is no requirement to file a return or take any action with respect to this tax if individuals that are Canadians (or permanent residents of Canada under immigration law) are on title and own the property in their own right.
To assist you in navigating these new filing requirements and tax liabilities we have included a Quick Reference Chart to help you determine if this applies to you:
Please reach out to your contact at BBLLP if you have any questions with respect to the UHT.