Connect Wealth | 13-2970 King George Blvd. | South Surrey, BC V4P 0E6, Canada
Phone: 604.542.4298 | Toll Free: 877.542.4298 | Fax: 604.542.4289
Do you have to pay?
If you own residential properties in Canada the Underused Housing Tax (UHT) may impact you. The filing and payment deadline for the 2022 calendar year has been extended by CRA to April 30, 2024, without being charged penalties or interest. Find out if you need to prepare.
What is it?
UHT is a federal housing tax imposed based on how your residential property is being used. Primarily aimed at non-residents of Canada, there are situations where the rules could apply to Canadian residents or citizens.
What is a residential property?
Residential properties in Canada include:
Am I affected?
You are excluded from filing if the residential real estate is owned/held by a:
All other affected owners (including private corporations, partnerships, trusts, and non-resident and/or non-Canadian citizen individuals), are required to file an annual UHT return and pay UHT unless they meet an available exemption.
Am I affected but exempt?
An annual UHT return must be filed to claim the exemptions:
What do I do?
UHT rules require affected residential property owners to file an annual UHT return with CRA, even if they are exempt from the tax. The result is that many Canadian trusts, partnerships, and corporations that hold residential property are required to file an annual UHT return for each property owned, even if there is no tax payable. In addition, there are significant penalties that may apply if the UHT return is not filed on time.
Tax on property of affected owners who are not exempt is calculated as 1% of the market value of the property, pro-rated for your percentage of ownership.
UHT dates to consider
Failure to file each annual UHT return can result in significant penalties, including:
In addition, penalties and interest will apply on outstanding taxes that are not paid by April 30th.
Wrapping it up
Understanding the details of UHT in advance of the first filing and payment deadline will ensure you are knowledgeable about UHT and the ever-changing tax landscape in Canada. If you are uncertain about whether or not you may be impacted by UHT, we would advise you to reach out to your accountant.
Connect Wealth is an independent financial planning firm that offers holistic advice to clients based on their current goals and future aspirations. We use well-established workflows and cutting-edge technology to maximize planning efficiencies while simplifying the process for clients. Learn how you can maximize your financial opportunities at www.connectwealth.com