Underused home tax

Underused home tax

Underused home tax

Non-residents of Canada must file their personal income taxes as well as Underused Housing Tax, which is the equivalent of the federal housing vacancy tax, by April 30, 2023.

Underused Housing Taxes (UHTs)

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Rules on vacancy taxes in real estate

• In addition to detached houses, semidetached houses, townhouses, apartment units, and apartments with less than three units (triplexes), all residential properties must be declared.

• Householders who need to declare UHT: individuals without permanent residence and Canadian citizenship, Canadian-controlled private companies (CCPC) and other private companies, personal trusts, partnerships

• Federal vacancy tax applies to Residential real estate in Canada, including Toronto, Markham, Richmond Hill, Vaughan, Aurora, Newmarket, Stouffville, Mississauga and other areas

The following are not required to be declared: Canadian permanent residents and citizens directly owning Canadian real estate, listed companies, registered charities, etc.

The house must be held on December 31 of the declaration year to be declared. The declaration form for each house must be filled out separately, and each co-owner must fill out their own declaration

A new filing year begins in 2022, with a deadline of 30 April in the following year.

It is necessary for the declarer to possess a SIN or ITN; for the company to possess a BN and a RU program account identifier code, which can be registered on the CRA website on February 6, 2023.

The penalties for late filing are as follows: Personal - $5,000; Other - $10,000

Tax on Vacancy of Property

• In general, the value of a residential property can be determined by two methods: its taxable value and its market value, which must be certified by the tax office.)

• The UHT payment deadline is April 30th of the following year

• It is definitely not necessary for those who do not have to declare UHT to pay UHT. Unless otherwise stated, UHT must be declared, but certain conditions may exempt the house from UHT and the owner from UHT. These factors include type of homeowner, usability of the house, address, use, and occupancy.

UHT is exempt for the following homeowners

1. Specifically Canadian companies: Companies where foreign companies own less than 10% of the shares or people who do not have Canadian permanent residence and citizenship own less than 10% of the shares.

2. A specific Canadian partnership system must have at least one partner who is permanently residing in Canada or an organization specifically located in Canada on December 31 of the reporting year

3. A specific Canadian trust must have a beneficiary who has Canadian permanent residence and citizenship or a specific Canadian company on December 31 of the reporting year

4. During the year, new homeowners acquired homeownership

5. Deaths of homeowners during the year

Following are some cases in which UHT can be exempted, depending on the ability to use the house

1. Houses built recently

2. A house that is not suitable for living all year round or during certain seasons

3. A house that is uninhabitable for an extended period of time because of a disaster, a danger, or renovations

There are some situations in which UHT is exempt, depending on the location and use of the house:

• In the reporting year, you or your spouse/common-law partner used a vacation home that is located in an eligible area (available on the CRA website).

UHT is exempt from certain conditions depending on the house's occupants

1. If you, your spouse or children are attending school, then the home is your primary residence

2. During the reporting year, the reporting period must be at least 180 days long. When someone lives in your home for at least one month continuously, it is considered to be a "qualified residence period".

a. Unaffiliated person with whom you have a written agreement

b. Rent is paid to you by a related person under a written contract

c. Either you or your spouse/common-law partner are a working visa holder

d. A Canadian citizen, permanent resident or family member of yours

For specific information, please consult your accountant.

Please refer Canada Official web site to find more detailed information. https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax.html