UNDERUSED HOUSING TAX (UHT)
According to a message I received from our accountants, Olafson & Jones, the Government of Canada recently passed legislation implementing the Underused Housing Tax (UHT) that may result in additional reporting and tax requirements for certain residential property owners.
KAT RENO feels the Property Management companies or the investors that we look after may be interested in reading this. You may already be aware of this; but, just in case.
If you own residential real estate (apart from your principal residence) either jointly with at least one other individual (including a spouse) or through a trust or through a corporation, you may be required to file the new UHT return.
Anyone that owns a residential property other than your principal residence and is not classified as an “Excluded Owner” must file a UHT return and may be required to pay an annual 1% tax on the Taxable Value or the Fair Market Value of the vacant or underused housing. The deadline for filing the 2022 return is October 31, 2023, with subsequent year returns being due April 30th.
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.
We realize this is a new administrative burden on taxpayers, and we trust you will accept this mailing as intending to help inform you and prevent you from unnecessary penalties. As there are many nuances and complexities involved in this reporting, it would be wise to discuss with your accountant so they may assist you in preparation of the return for you if necessary.
As usual, keep KAT RENO in mind for any renovations you have on your rental properties or your personal property.
