Underused Housing Tax Act

Bill C-8 will enact the Underused Housing Tax Act (the “UHT Act”). The UHT Act will impose an annual tax equal to 1% of the value of certain residential properties. There are steep penalties for failing to file the associated return, which some persons must file even if no tax is payable.

An individual who is a Canadian citizen or permanent resident need not file the return. An individual who is resident in Canada for tax purposes but not a citizen or permanent resident must do so, even if no tax is payable.

The filing requirement applies to all private corporations, partnerships, trusts and estates that own residential property. The deadline for filing the UHT Act is April 30 even if the corporation or estate has some other filing deadline for its return under the Income Tax Act (Canada).

Apparently, the CRA has stated that compliance with the UHT Act will be reviewed as part of the process for issuing a section 116 certificate.

Berci, Katlai and Neilson “The Underused Housing Tax: Traps Abound” 12:2 Canadian Tax Focus (May 2022)

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