Underused Housing Tax - UHT

The UHT is a one per cent annual levy on the value of a “vacant or underused” property belonging to “non-resident, non-Canadian owners,” although it may apply to some Canadian owners as well.

Unless residential property owners are “excluded owners,” they are required to complete an annual return. Excluded owners include, but are not limited to:

* Most Canadian citizens or permanent residents (except for affected persons listed below);
* Any person that owns a residential property as a trustee of a mutual fund trust, a real estate investment trust, or specified investment flow-through trust;
* A registered charity;
* A cooperative housing corporation; or
* An Indigenous governing body or corporation owned by an Indigenous governing body.

It is important to underscore that even owners who may fall under one of the exemptions are required to complete a filing. The following affected owners are required to file a return:

* Non-Canadian citizens or permanent residents,
* Canadians who own a residential property as a trustee of a trust,
* Any person that owns a residential property as a partner of a partnership,
* A corporation incorporated outside Canada,
* A corporation whose shares are not listed on a Canadian stock exchange, and
* A Canadian corporation without share capital.
A failure to file an UHT return can result in penalties beginning at $5,000 for individuals and $10,000 for corporations.

Disclaimer: Specialized tax advice falls outside the expertise of a Realtor. Property owners are advised to consult with their local municipal government or a qualified tax professional to obtain specific details regarding their property tax obligations.