Underused Housing Tax Filing Reminder

15 Jun Underused Housing Tax Filing Reminder

Posted at 18:07h in Latest News by Team Clearline 15 Jun

We would like to remind our clients about the deadline for filing Underused Housing Tax (UHT) returns. While the original deadline of April 30, 2023 has technically not changed, the Canada Revenue Agency (CRA) has announced that no penalties or interest will be assessed on UHT returns filed before November 1, 2023. We know that many of you are making use of this grace period, but don’t wait too long to determine whether or not you need to file. Clearline CPA is here to support you in ensuring compliance with the UHT regulations and avoiding unnecessary penalties and interest.

The UHT Act received Royal Assent in June of 2022, and is retroactive to January 1, 2022. The UHT assesses a 1% annual tax on the value of vacant and underused residential properties owned, either directly or indirectly, by foreign, non-resident owners. The value is based on the greater of the current value assessment and the most recent purchase price.

Corporate Owners of Residential Real Estate

While the obligation for the tax is designed to focus on individuals who are not Canadian citizens or permanent residents, the filing requirements are not so focused. Our biggest concern is that there is a catch for anyone holding residential real estate via a corporation, partnership or trust. Any Canadian corporation, partnership or trust holding residential real estate in Canada that may not be subject to the tax still MUST file a return or be subject to the penalties for not filing. This is where we believe most of our clients are at risk of being penalized and why we want to ensure that this does not occur.

Late Filing Penalties

The penalty for failing to file a declaration is the greater of $5,000 for individuals and $10,000 for corporations, partnerships and trusts, and the total of 5% of the UHT, plus 3% of the UHT for each calendar month the declaration is past due. Due to the significance of the penalty, you may want to err on the side of filing where there is uncertainty on the filing obligation.

To avoid penalties and interest, it is crucial to file your UHT returns before November 1, 2023. Failing to meet this deadline may result in serious financial consequences as noted above. However, Clearline CPA is here to help you navigate the complexities of UHT regulations and ensure a seamless filing process.

Here’s how we can support you:

Expert guidance: Our knowledgeable team is well-versed in UHT regulations. We stay updated on the latest developments and can provide you with accurate information and guidance to ensure compliance.
Filing assistance: Clearline CPA is equipped to handle all aspects of UHT filing on your behalf. Our team will gather the necessary information, prepare your UHT returns accurately, and submit them before the November 1, 2023 grace period ends.
Property assessment: Determining whether your property is underused according to UHT criteria can be complex. Our tax professionals can help you assess your property’s utilization and provide insights on how to optimize its usage to comply with UHT regulations.
Tailored solutions: Every client’s situation is unique. Clearline CPA offers personalized solutions tailored to your specific circumstances.

We want to avoid a scenario where you realized the need to act on this in October and become overwhelmed by the demand. So, we encourage you to take a little time out of your summer to reach out to your Clearline representative(s) and determine whether or not you should submit a UHT return. Our team is ready to assist you throughout the process, ensuring compliance with UHT regulations and maximizing the benefits available. Don’t miss this opportunity—contact Clearline CPA today to streamline your UHT filing and navigate the complexities of this new tax requirement successfully.