Underused Housing Tax Filing Deadline Extended to October 31, 2023

This bulletin supplements our previous bulletin circulated on February 17, 2023, and must be read in conjunction with it, as some of the information contained in the previous bulletin is no longer applicable.

The Underused Housing Tax Act (the “Act”), which came into effect on January 1, 2022, implements an annual 1% tax on the value of vacant or underused residential property in Canada that is directly or indirectly owned by non-resident, non-Canadian individuals.

The Canada Revenue Agency recently announced that no penalties or interest will apply if Underused Housing Tax (“UHT”) returns are filed and payments are made by October 31, 2023. While the deadline for filing a UHT return for the 2022 taxation year was April 30, 2023, the waiver of penalties and interest effectively extends the filing deadline to October 31, 2023.

Every owner of residential property who is not an “excluded owner” under the Act must file an annual return, even if an exemption applies such that no tax is payable. Owners who must file include trustees of trusts (subject to certain exceptions) and privately held corporations.

Failing to file a required return will result in a minimum penalty of $5,000 if the person is an individual or $10,000 if the person is not an individual.

If you have any questions or would like more information on the Underused Housing Tax, please contact a member of our Tax Group.