Owners of residential property in Canada now have additional time to meet new tax filing obligations under the Underused Housing Tax (UHT) rules. Generally, certain Canadian private companies and individuals, as well as non-resident, non-Canadian owners, have to file an annual return for specific types of residential property they own, and also determine whether they are liable for a 1% annual UHT on that property. Although affected owners must file a separate UHT return and pay any related UHT by April 30, 2023 for each reportable residential property they owned on December 31, 2022, the CRA has now announced that it will waive penalties and interest for any late-filed UHT return and for any late-paid UHT, provided the affected owner files any required returns and pays any related UHT by October 31, 2023.
Although this announcement provides some welcome relief in light of the fast-approaching deadline for the 2022 taxation year, affected residential property owners should continue to act quickly to comply with these rules so they do not face significant penalties, even where a return is required, but no tax is ultimately payable. In particular, entities should identify all affected owners in their structures who owned reportable residential property on December 31, 2022 and ensure these owners prepare a separate UHT return for each reportable residential property and, unless they meet an available exemption, pay any related UHT.
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