Underused Housing Tax (UHT) Update

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On March 27, 2023, the Canada Revenue Agency announced that there will be no penalties or interest for those Underused Housing Tax (UHT) 2022 returns filed by October 31, 2023.  They will provide transitional relief to affected owners since this is the first year of the UHT administration. 

This transitional relief means that although the deadline for filing the UHT return and paying the UHT payable is still April 30, 2023, no penalties or interest will be applied for UHT returns and payments that the Canada Revenue Agency receives before November 1, 2023.

As many of you are aware, the federal government introduced a 1% annual UHT on the ownership of vacant or underused housing in Canada. Although the UHT is directed towards non-Canadian owners, it creates a UHT return filing obligation for “affected owners” (includes certain individuals, corporations, trusts, and partnerships) that owned residential property in Canada on December 31, 2022. The original UHT return filing deadline was April 30, 2023. The penalties for failure to file a UHT return by the deadline are at least $5,000 for an individual and $10,000 for non-individuals.

In light of this recent government announcement, LCA will take the following steps:

  • We will complete all UHT returns that are currently in process
  • We plan on completing the remaining UHT returns in the period from May to August 2023
  • Our focus for the remainder of March and April 2023 will be to complete all trust, partnership, and personal tax returns since these deadlines are fast approaching

If you have any questions, please feel free to reach out to your LCA advisor.

 

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