Owners of certain residential property in Canada should act quickly to meet their obligations under the Underused Housing Tax (UHT) as the first-year transitional relief runs out on October 31, 2023. The 2022 UHT return had a filing deadline of April 30, 2023. However, the CRA has indicated that it will provide relief from late-filing penalties and interest to affected owners that file their 2022 UHT return and pay any related UHT by October 31, 2023.
Even where there is no tax payable, an affected owner still have to file a return if they owned a residential property on December 31, 2022. Corporations, partnerships and trusts that own a residential property are likely affected owners.
Under the UHT rules, affected owners are required to file an annual return for each reportable property they own as of December 31, and pay the 1% UHT where applicable or face a penalty of $5,000 per return among other penalties. For corporations, the penalty for not meeting the filing deadline is a minimum of $10,000 per return among other potential penalties. For more details and background on the UHT, see Underused Housing Tax and Update to Underused Housing Tax (UHT). Also, the CRA has issued UHT guidance that may help owners assess how the UHT applies in specific situations, including where a property has recently sold, newly constructed property, and converted residential properties.
If you require assistance in determining if you have an UHT Return filing requirement or in completing the form before the filing due date, please contact Lott & Company.
