What Is The Underused Housing Tax (UHT)?
Effective January 1, 2022, owners of vacant or underused housing in Canada could be subject to an annual 1% tax.
The tax is calculated as 1% of the taxable value of the property as of December 31 of the previous year.
Who is subject to the Underused Housing Tax (UHT)?
The Underused Housing Tax Act does not apply to all residential property owners in Canada. Those affected by the UHT include all non-Canadians, corporations, partners and trustees on title to a residential property. This includes any Canadians on title as a partner or trustee. If you are an affected owner, you have an UHT filing obligation.
In contrast, excluded owners include, but are not limited to:
- Canadian citizens or permanent residents
- Any person that owns a residential property as a trustee of a mutual fund trust, real estate investment trust, or specified investment flow-through trust for Canadian income tax purposes
- Canadian corporations whose shares are listed on a Canadian stock exchange designated for Canadian income tax purposes
- Registered charities for Canadian income tax purposes
- Cooperative housing corporations for Canadian GST/HST purposes
- Indigenous governing bodies or corporations wholly owned by an Indigenous governing body
In contrast, those affected by the UHT include all non-Canadians, corporations, partners and trustees on title to a residential property must file a UHT return. This includes any Canadians on title as a partner or trustee. If you are an affected owner, you have a filing obligation.
Affected owners must file an UHT return for each residential property owned in Canada on December 31 of the previous year. You must also pay the tax unless your ownership qualifies for an exemption for the calendar year. Nevertheless, even if you are eligible for an exemption, you must file a return to claim the exemption.
When Should I Filed My Underused Housing Tax (UHT)?
You must file the return and pay any tax owing by April 30 of the following calendar year.
What Are The Penalties For Not Filing My Underused Housing Tax (UHT)?
Affected owners who do not file on or before April 30 are subject to a fine of $5,000 or more as an individual or $10,000 or more as a corporation.
Need help understanding the Underused Housing Tax (UHT)?
For any questions regarding the Underused Housing Tax (UHT), please contact our office and someone one our real estate team will be happy to help!
