February 14, 2023 Pixsoul Developer

New Underused Housing Tax (“UHT”)

Dear Valued Clients:

We are reaching out to inform you about the new Underused Housing Tax (“UHT”) that was recently implemented by the Canadian Federal Government.

Specifically, the federal government recently implemented the UHT.  The UHT is an annual 1% tax on the ownership of vacant or underused residential housing in Canada that took effect on January 1, 2022 and it is administered by the Canada Revenue Agency.  The UHT can apply to all ownership structures of residential properties, including individuals.

An individual owner who is a Canadian citizen or permanent resident is exempt from filing the UHT return and is not liable for the tax. 

Many Canadian private corporations, partnerships, and trusts – including those with only Canadian owners – that hold residential property are required to file an annual UHT return for each property even where no tax is payable.

Significant penalties can apply if the UHT return is not filed on time.  Affected owners are subject to minimum penalties as follows:

  • Individuals – $5,000
  • Non-individuals (including corporations) – $10,000

Where a 2022 UHT return is required to be filed, it is due by April 30, 2023 and a separate return is required for each owner of each property.

Please reach out to us if you require our assistance with completing an analysis to determine if you will be subject to the UHT for the 2022 year with respect to any Canadian real estate you may own.  We are also available to assist you with the preparation and filing of the UHT return (if applicable) for the 2022 year.