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Home  ->  Canada  ->  Federal 2021 Budget ->  Underused Housing Tax

Canada's Underused Housing Tax (UHT)

Underused Housing Tax Act

This Affects All Owners of Canadian Residential Property Except Excluded Owners!

The legislation for the Underused Housing Tax Act was included in Bill C-8, An Act to implement certain provisions of the economic and fiscal update, which received Royal Assent on June 9, 2022.  It was originally proposed in the Federal 2021 Budget.

bulletEffective January 1, 2022, for the 2022 calendar year.
bulletAll owners, other than Canadian citizens or permanent residents of Canada must file a declaration as to the current use of residential property owned by them and located in Canada. This statement from the 2021 Budget is quite misleading.
bulletA Canadian citizen or permanent resident will have to file a declaration if they are an owner of the residential property in their capacity as a trustee of a trust (other than a personal representative in respect of a deceased individual) or as a partner of a partnership.
bulletPrivate corporations which own residential property will have to file a declaration.  Public corporations are considered "excluded owners"
bulletThe penalty for failure to file is a minimum of $5,000 for an individual or $10,000 if the person is not an individual.
bulletNational annual 1% tax on the value of underused or vacant residential property.
bulletAn exemption from the tax may be available to be claimed by the owner of the property.
bulletThe tax is based on the taxable value of residential property located in Canada considered to be vacant or underused, if the owner is not a Canadian citizen or permanent resident of Canada. Taxable value means an amount that is:
bulleta prescribed amount; or if no amount is prescribed, the greater of
bulletthe assessed value as assessed by a provincial or federal government, and
bulletthe residential property's most recent sale price on or before December 31 of the calendar year.
bulletA person may elect to use the fair market value of the property.
bulletDue date for the Underused Housing Tax return, election for fair market value, and the payment of tax for a calendar year is April 30th of the following calendar year.

See Bill C-8 Legislative Summary Part 2: Enactment of the Underused Housing Tax Act which lists excluded owners and exemptions.  Owners who are exempt must still file a declaration.

See Video Tax News Life in the Tax Lane December 2022 for more information.

Government of Canada Resources

Budget 2021 Annex 7: Consultations on Other Tax Measures: Supplementary Information - search (ctrl-f) or scroll down to Tax on Unproductive Use of Canadian Housing by Foreign Non-resident Owners.

Economic and Fiscal Update 2021 - Tax Measures - Underused Housing Tax

Excise and GST/HST News - No. 112 - Underused housing tax program

Provincial Taxes on Property

BC Speculation and Vacancy Tax and City of Vancouver Empty Homes Tax

BC Foreign Buyer Tax

Ontario Taxes on Property - includes Foreign Buyers Tax, Ottawa and Toronto Vacant Home taxes

Revised: November 30, 2022

 

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