New filing deadline for Underused Housing Tax
Affected Owners
This tax was intended to target vacant or underused residential housing in Canada owned by non‑Canadian owners, but many new details have emerged regarding this legislation which has created a filing requirement for many Canadians. Many exemptions are available to prevent application of the tax, but these exemptions must be applied for as part of the annual filing. A few common examples of situations where you are required to file include residential property owned on December 31, 2022 by:
- Individuals: Non-Canadian citizens or permanent residents.
- Corporations: Residential rental properties held in corporations, or if you transferred title to your home into a corporation for probate planning purposes.
- Partnerships: Residential rental properties jointly owned with other individuals.
- Trusts: Formal trusts, or if you are on title on another individual’s home. For example, a parent owning 1% of their child’s home to help them obtain a mortgage.
We recommend reviewing your most recent property tax bill to confirm the ownership of your property.
Penalties
A minimum penalty of $5,000 for individuals and $10,000 for corporations will be applied for each unfiled or late‑filed return. A separate return is required for each property so the penalties can be significant. We are not aware of any relief available at this time for late‑filed returns. It is imperative that all returns are submitted no later than April 30, 2023.
Please contact us if you would like to discuss any of the above further and we would be happy to assist you.
NOTE: Please understand that any posts written in the past may not be reflective of the current applicable obligations, rights and benefits.