It’s almost “tax time” and in the interests of helping homeowners avoid the unexpected, you should know about a new tax that could — repeat, could — apply to some homeowners. It’s called the Underused Housing Tax Act (UHT for short) and residential property owners can be categorized into two classifications — excluded owners and affected owners.
To find out which you are, it’s probably advisible to check with a tax professional, or at least go to this page on the Federal Government website to see if you can figure out whether you’re an excluded owner or an affected owner.
As for the tax, it’s one per cent of the property’s value as of January 1, 2022, and the deadline for filing is April 30, the end of this month. If you are an “affected owner” it’s compulsory to file a return even if you have no tax payable, because it will show you are exempt.
If it sounds confusing, that’s because it is. In its opening statement, the government says: “The tax usually applies to non-resident, non-Canadian owners. In some situations, however, it also applies to Canadian owners.” Also that: “The UHT imposes a tax on every taxpayer who, on December 31 of a calendar year, is an owner of a residential property in Canada, unless the owner is an ‘excluded owner’ or an individual who qualifies for one of several exemptions available under the Act.”
So it appears the onus is on homeowners who have property that could be classified as “underused.” Anybody who thinks that could mean them is advised to check it out before April 30.