Hounjet Tastad Harpham has decades of accounting experience working with clients across Saskatchewan. Their expert accounting advice is valued by clients ranging from individuals to businesses, small and large. Hounjet Tastad Harpham is a Trusted Saskatoon Accounting firm, and in their latest helpful Saskatoon accounting and tax tip, they explain the new Underused Housing Tax (UHT) Returns.
Underused Housing Tax (UHT)
The Government of Canada implemented the Underused Housing Tax (UHT) on June 9, 2022, and as of December 31, 2022, it will impact certain residential property owners.
A residential property owner who is not classified as an “Excluded Owner” must file the UHT return by April 30 of the following year. They may be required to pay an annual 1% tax on the Taxable Value or the Fair Market Value of the vacant or underused housing.
Excluded Owners include Canadian citizens and permanent residents, so most individuals will not need to file a UHT return. However, all private corporations, partnerships and trusts (even those owned by Canadian citizens) who own residential property will be required to file a UHT return annually, even if they are exempt from the UHT.
Failure to file a UHT return has significant penalties, starting at $5,000 for individuals and $10,000 for corporations. Further, failure to file could lead to the UHT being payable, even if an exemption should have applied.
If you are a Canadian citizen or permanent resident (except in capacity as a partner or trustee), no action is required on your part. Anyone else who owns residential property, including individuals who own the property as a partner or trustee, may want to consider discussing your situation with your tax advisor.
Exemptions
Your ownership of a residential property may be exempt from the Underused Housing Tax for a calendar year depending on:
- the type of owner you are
- the availability of the residential property
- the location and use of the residential property
- the occupant of the residential property
Remember, if you are an affected owner of a residential property in Canada on December 31 you still have to file an Underused Housing Tax return for the residential property for the calendar year, even if your ownership qualifies for an exemption.
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