Dear Valued Client, 

The 2022 Underused Housing Tax (UHT) return deadline is fast approaching. Earlier this year, the CRA extended the filing deadline for the new housing tax from April 30, 2023 to October 31, 2023 to allow more time for taxpayers to determine their filing obligations. The late-filing penalty is a minimum of $5,000 for individuals and $10,000 for non-individual taxpayers. 

Although this new tax has been presented as a housing tax for foreign owners, the rules are affecting a large population of Canadian citizens and resident homeowners. Most Canadian citizens and residents do not owe tax under the rules, but they still have filing obligations which are subject to the late-filing penalties mentioned above.

We encourage you to speak to your tax advisor about your filing obligations,especially if you fall into one of the following categories:

• You have a corporation that owns residential property;
• You are a trustee of a trust that holds residential property;
• You are on title to a residential property with your adult child for financing purposes; and
• Your adult child is on title to a residential property with you for estate planning purposes.

This is not an exhaustive list of scenarios in which the new tax may apply to you. CRA’s publication on the Underused Housing Tax can be found here.

If you have any questions about the UHT or how it relates to you, please contact your team at First Avenue.

Sincerely,

First Avenue Investment Counsel