Are you aware of the new Underused Housing Tax (UHT) being administered by the Canada Revenue Agency (CRA)? This tax came into effect on January 1st, 2022 and may affect you as a homeowner or landlord. It’s important to understand the requirements and take necessary steps to comply with the law.
Unlike the City of Toronto’s Vacant Home Tax, which is administered by the city, the UHT is being handled by the CRA. This means that determining whether or not you need to file can be a complicated process. The CRA has published a guide to help you understand the UHT, which you can access here:
Unlike the City of Toronto Vacancy Tax filing, not everyone will be affected and need to file. Since this is coming from CRA, the process to determine if you need to file is more complicated.
Based on your circumstances you will need to determine one of the following:
• Are you exempt from filing an annual return.
• Are you NOT exempt from filing an annual return, but you are exempt from paying the tax.
• Are you NOT exempt from filing an annual return, but you owe the tax
The due date for filing the annual return (https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/uht-2900.html) is April 30th, 2023. There are significant penalties if you fail to file an annual return when it is due, even if you don’t owe the tax. Affected owners who are individuals are subject to a minimum penalty of $5,000 just for filing late. Affected owners that are corporations are subject to a minimum penalty of $10,000 for late filing.
It’s important that you communicate directly with your professional tax advisor at your earliest opportunity to ensure compliance. Very much like your annual tax filings we cannot file nor complete these returns on your behalf, nor are we able to provide any professional advice on the matter. We are simply not qualified nor prepared to undertake any liability if we accidentally provide wrong information. Any questions regarding the completion of the return or whether you need to complete a return should be directed to your tax advisor.
The following are additional government websites we’ve found on the matter:
https://laws-lois.justice.gc.ca/eng/acts/u-0.5/page-1.html
We’ll continue to update should new information become available.
