February 15, 2024
Dear Clients,
If you recall, our Federal Government delayed the due date for filing the 2022 Underused Housing Tax Returns from April 30, 2023 to October 31, 2023 and at the 11th hour of October 31, 2023 they further extended the filing to April 30, 2024.
At the same time as releasing the November Economic Statement, the Government released a Notice of Ways and Means Motion (“draft legislation”) to amend the Underused Housing Tax Act effective January 1, 2023.
This draft legislation, presuming it is enacted, will have the effect of greatly reducing the administrative burden posed on Canadians for 2023 and onwards.
The definition of Excluded Owner (with no UHT filing obligation) has been substantially expanded. The definition of Excluded owner now includes:
- A Specified Canadian Corporation (Canadian corporations with more than 90% of votes or value owned by Canadians)
- A Trustee of a Specified Canadian Trust (Trustees of trusts where the beneficiaries are Canadian or persons that are another Specified Canadian Trust, or the above and below categories)
- A Partner of a Specified Canadian Partnership (Partnerships with Canadian partners or persons that are another Specified Canadian Partnership or from the above categories)
When an Excluded Owner own a Residential Property, they are not required to file a UHT return for 2023 and onwards.
The onerous failure to file penalties for each Residential Property have been reduced to $1,000 for individuals (from $5,000) and to $2,000 for all other owners (from $10,000).
The definition of Residential Property has been revised to exclude rental condominium units in buildings with 4 or more rental units if certain conditions are met.
The good news is that come April 30, 2024, when the 2023 UHT filings are due, it is likely that many Canadian clients will no longer be obligated to file this return. If you are uncertain whether you have a 2023 filing obligation, please contact us. Note that for these purposes a Canadian is a citizen or permanent resident.
The old rules remain in place for the 2022 calendar year. As mentioned, the filing deadline for 2022 has been delayed until April 30, 2024. If you require an evaluation of whether you have a 2022 filing obligation, please contact us as soon as possible. The previous rules can be found at the links on our website:
https://millerbernstein.com/2023/02/15/summary-of-underused-housing-tax-act/
https://millerbernstein.com/2023/04/13/underused-housing-tax-act-uhta-update/
