What is the Underused Housing Tax?

The new Underused Housing Tax was enacted into law and applicable for January 1, 2022 onward. This tax, due annually, is based on the value of your residential properties and is payable if those properties were considered "underused" in the past year. The tax is 1% of the value of the property. It is very important that you do not ignore the filing requirements, as the failure to file penalties are $5,000 for individuals, and $10,000 for other entities. The filing requirement still exists for individuals and other entities that do not have "underused" residential properties. Please refer to the following lists to determine if you are required to file this new return.

The following individuals or entities ARE REQUIRED to file the annual return:

1. Canadian Controlled Private Corporations that hold residential property in Canada

2. Other corporations that hold residential property in Canada

3. Trusts that hold residential property in Canada

4. Partnerships that hold residential property in Canada

5. Non-resident individuals that hold residential property in Canada

The following individuals or entities are NOT REQUIRED to file the annual return:

1. Canadian Citizens

2. Permanent residents

3. Public corporations

4. Registered charities

5. Universities, public colleges, school authorities

6. Hospital authorities

7. Cooperative housing corporations

8. Municipalities, or corporation owned by such entities

9. Indigenous governing bodies, or corporations owned by such entities

10. Government of Canada, provincial government, or agent of either

11. Various forms of publicly-traded trusts

The return is due April 30th, 2023.

For more information please contact our office and we will be happy to answer your questions about the NEW UNDERUSED HOUSING TAX FILING REQUIREMENTS.

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