Several changes to the UHT have been proposed, most notably removing the requirement for specified Canadian corporations, trusts and partnerships (refer to Appendix A for the definitions of these terms) to file UHT returns for 2023 and beyond.
In the 2023 Fall Economic Statement, the Federal Government has introduced substantial revisions to the Underused Housing Tax (UHT) and its administration thereof. Originally proposed as a tax on the value of vacant or underused residential real estate owned by non-residents of Canada, the UHT has seen several changes and effective delays to the inaugural filing.
When the UHT initially took effect on January 1, 2022, it required corporations, trusts and partnerships that own residential real estate to file a UHT return, even if the UHT would not be payable or applicable. Following several extension dates to its original filing deadline (including an extension that was announced the day prior to the October 31, 2023, extended filing deadline), the Federal Government has modified the requirement for businesses, trusts and partnerships to file its 2023 UHT return. Note that these changes impact 2023 UHT returns and not 2022 UHT returns. 2022 UHT returns are now due April 30, 2024.
These changes are expected to be implemented early in 2024. While Bateman MacKay’s tax department celebrates these changes to lighten the burden placed on taxpayers, the Federal Government took almost three years since the initial announcement of the UHT to simplify the same. If you require assistance with a UHT filing or any other corporate tax, accounting or business advisory issue, reach out to the experts at Bateman MacKay.
APPENDIX A - DEFINITIONS
Specified Corporations, Trusts and Partnership Definitions for UHT Purposes
A specified Canadian corporation is a corporation that is incorporated or continued under the laws of Canada or a province and, on December 31 of the calendar year, is neither of the two following corporations:
A specified Canadian trust is a trust whose beneficiaries that have a beneficial interest in a residential property are all, on December 31, excluded owners or specified Canadian corporations.
A specified Canadian partnership is a partnership whose members are all, on December 31, any of the following:
Full details can be found on this CRA website.
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