On October 31, 2023 the Government of Canada announced another filing extension for 2022 Underused Housing Tax (UHT) returns. They are now due by April 30, 2024 to avoid penalties. In addition, in the November 21, 2023 Fall Economic Statement the Government of Canada proposed changes to the UHT return filing requirements.
Excluded owners are not required to file a UHT return. The key change proposed is to add a specified Canadian Trust, a partner in a specified Canadian partnership and a specified Canadian corporation to the definition of excluded owners thus eliminating their filling requirement.
A specified Canadian corporation is essentially one with less then 10% of the corporation owned by persons who are neither Canadian citizens, permanent residents, or Corporations that are not incorporated in Canada.
A specified Canadian partnership will be one where, on a look through basis, each partner is an excluded owner.
A specified Canadian trust will be one where each beneficiary, on a look through basis, is a Canadian citizen or permanent resident or a specified Canadian corporation, partnership or trust.
These changes are effective for the 2023 calendar year. The 2022 returns must still be filed.
Once these changes are in place UHT returns will not be required in most cases where the ultimate owner is a Canadian citizen or permanent resident regardless of where they reside.
At the time of writing these changes were not yet passed. The CRA has an update page on its website at Who must file a return and pay the tax – Underused Housing Tax (UHT) – Canada.ca If the changes are not passed sufficiently before the April 30th deadline it may be prudent to file a return in case they do not become law by the UHT return due date.
If you are unsure of your filing requirements, please contact your SSK Team member to discuss this further.
