ARTICLE · 30 MARCH 2023

The Underused Housing Tax Act- Filing Requirements That May Be Surprising

Robins Appleby LLP

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The Underused Housing Tax Act ("UHTA") levies an annual tax on individuals who are neither permanent residents of Canada nor Canadian citizens at a rate of 1% on the value...

CanadaTax

Thomas Witteveen

Ronald Appleby KC

Jordana Lyons (Articling Student)

Heela Donsky Walker

Errol H. Tenenbaum

David R. Schlesinger

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Overview

The Underused Housing Tax Act ("UHTA") levies an annual tax on individuals who are neither permanent residents of Canada nor Canadian citizens at a rate of 1% on the value of their vacant or underused residential property in Canada that contains less than three units. It also creates a surprising and onerous annual filing requirement for certain Canadian private companies and Canadian resident individuals not liable for the tax. The filing requirements apply to a nominee corporation that owns the residential property in Canada under a bare trust arrangement, and a trustee of a trust that is not a mutual fund trust, real estate investment trust (REIT), or specified investment flow-through (SIFT) trust for Canadian income tax purposes.

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