02/23/2023
Important Information for American Property Owners regarding the Underused Housing Tax.
Note, all American property owners are required to file a return by April 30, 2023, even if they qualify for an exemption under the Act (ie due to property being seasonally inaccessible or not suitable for year-round occupancy).
Failure to file a return will result in a minimum $5,000 penalty. Please share with your lake neighbours who may be impacted by this!
New this tax season is the Underused Housing Tax (UHT). This is a federal Canada wide new tax and declaration form. It came into effect on January 1, 2022. But more information has now been provided by CRA and the form is now available.
What is it; This is a 1% annual tax on the value of non-resident, non-Canadian owned residential real estate that is considered to be vacant or underused.
Why it’s important; The big deal with this new requirement is that unless you are an excluded owner, you must still file an annual return regardless of whether you will have to pay any tax or not. And some Canadian owners will be impacted like CCPCs and trusts (if you own a cottage in Canada via a trust you should be paying attention).
When; The Annual declaration Form UHT-2900 is required and due by April 30th, 2023.
Penalties are STEEP for not filing the annual UHT form. Penalties are at least $5,000 for failure to file the declaration for individuals and $10,000 for failure to file for corporations.
If you are unsure if this impacts you or if you require assistance with applying for an Individual Tax Number (ITN) in Canada and/or need assistance with this new filing requirement, please contact me directly.
