Warning Residential property owners in Canada – a new
federal tax is being levied through the Underused Housing Tax
Act on underused residential properties. Not all residential
property owners, however, are subject to the tax. In fact, Canadian
citizens and permanent residents can breathe a sigh of relief as
they fall within a class of "Excluded Owners" (defined in
the Act) and are not subject to the tax. On the other hand,
Canadian private corporations, partnerships, trusts, and
non-citizens are not included in the definition of an
"Excluded Owner." They may be required to pay the tax on
residential properties unless eligible for an exemption under the
Act.
The federal Underused Housing Tax Act (the
"Act") came into effect in June 2022. The Act implements
an annual tax payable by registered residential property owners,
other than Excluded Owners, equal to 1% of the fair market value or
the taxable value of residential properties in cases where the
property is
