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ARTICLE · 31 MARCH 2023

The Underused Housing Tax And Reporting Requirements For "Effected Owners"

Gardiner Roberts LLP
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The Underused Housing Tax (the "Act"), which came into effect on January 1, 2022, introduces an annual 1% tax on the value of vacant or underused residential property in Canada...

CanadaTax
Ian Spiegel
Ian Spiegel
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The Underused Housing Tax (the "Act"), which came into effect on January 1, 2022, introduces an annual 1% tax on the value of vacant or underused residential property in Canada that is directly or indirectly owned by a non-resident, non-Canadian.1 The purpose of the Act is 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 of tax.2 Essentially, the goal is to encourage non-resident owners to sell underused property in Canada to free up empty homes and improve housing affordability for Canadians. However, as the Act currently exists, it imposes filing obligations on certain resident Canadians, rather than just foreign property owners, even where the tax would not be applicable.

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