ARTICLE · 07 FEBRUARY 2023

A Tax Trap For The Unwary!

Devry Smith Frank LLP

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In its April 2021 budget the Trudeau government proposed a new tax on vacant residential properties owned by nonresidents. According to the budget document "This will help to ensure that foreign...

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Devry Smith Frank LLP

William J. Smith

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In its April 2021 budget the Trudeau government proposed a new tax on vacant residential properties owned by nonresidents. According to the budget document "This will help to ensure that foreign, non-resident owners, who simply use Canada as a place to passively store their wealth in housing, pay their fair share." Finance Minister Chrystia Freeland told reporters at the time "The idea here is that homes are for Canadians to live in, they are not assets for parking offshore money."

The Underused Housing Tax Act passed in June of 2022 and introduced an annual 1% tax on the targeted properties. The tax is retroactive to calendar years commencing January 1, 2022. The Canada Revenue Agency published technical details as well as the form of the return on January 31^st, 2023.

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