What you need to know about the Underused Housing Tax 

The Underused Housing Tax is an annual federal tax of 1% on the ownership of vacant or underused housing in Canada. It has been in effect since January 1, 2022 and typically applies to foreign national owners of housing in Canada.

Please note if you are an individual Canadian who owns property directly, you are an ‘excluded owner’ and do not have to file; however, certain Canadian owners, such as partners, trustees, and corporations, may also be subject to the tax in specific situations. If you own a property that falls under this category, you will need to file a return with the CRA by October 31st, 2023. To learn more about this tax and how to file a return, please visit the Government of Canada website.

There are 2 independent components to the tax

• Determine if you need to file

Visit The Government of Canada Website to determine if you need to file.  Based on a quick evaluation of your property ownership, you can determine if you need to file. Click here know more.

• Determine if you can claim an exemption when you file.

Once you have determined whether or not you will need to file, you can then determine if you will need to pay the tax. You may not have to pay the tax, but you have to file a return and claim an exemption.

Are you affected by it?

To find out more about whether you are exempt from the UHT, you must visit the Government of Canada website and must file your return by Oct 31, 2023. The website should provide you with more information on how to file and whether you are eligible for an exemption.

How to file? 

It is important to note that eligibility for exemptions may vary depending on individual circumstances, and it is always recommended to consult with a tax professional or the relevant government agency for specific guidance.You can file for the underused property tax, by filling out the form on the Government of Canada website.

You could also refer to the Q&A section to learn more about the Underused Housing Tax and how that may affect you.