Last spring GBA reported on the proposed new Underused Housing Tax (UHT) for US and overseas property owners. The federal government put forth this new one per cent annual tax levied on the value of residential property that is vacant or considered underused. The intention of this tax is to make housing more affordable for Canadian residents by deterring non-residents from passively investing in Canadian real estate.
GBA has been looking into the effects UHT may have on our members. Here are some of our findings:
- This new tax only applies to non-Canadian residents.
- Canadian residents do not need to submit a UHT tax form.
- Non-Canadian residents must submit this form by April 30 annually even if they are exempt from the tax.
- As far as GBA is aware, non-resident owners of properties on the east and north coasts of Georgian Bay fall under one of the exemptions (630 or 635) on page 5 of the form, which can be found here.
- To file your UHT tax form, with the Canada Revenue Agency (CRA) you must have a valid CRA tax identifier number. If you do not have a Canadian Social Insurance Number (SIN) you must file using an Individual Tax Number (ITN) which you can apply for here.
- GBA has spoken to the Canadian Revenue Agency (CRA) and they see no issue with not having a postal code to input on the form (only road access properties will have a postal code).
- Do not use the postal code of your local post office as this may reverse your exemption.
- Not having a postal code means that you will also be unable to access the: “Underused housing tax vacation property designation tool”, but it is not necessary to do so if you are exempt as above, and the tool is not helpful, in any event.
- The minimum penalty for missing the April 30 filing deadline is $5,000 per property for any individual owner. Additional penalties can apply depending on how late the return is filed.
More information on the UHT can be found here.
This web post is intended for general information purposes only. While we have attempted to provide information that is helpful for our readers, GBA does not provide tax, legal or accounting advice and accepts no legal liability for the contents of this web post. Ensure you check original sources for additional details and updates. For advice regarding your personal taxation and filing needs, please contact your own tax professional or accounting advisor.
