Postponement of Penalties and Interest for Underused Housing Tax

Although the UHT return and payment deadline remains April 30, 2023, the CRA will not impose penalties or interest for UHT returns or payments received before November 1, 2023.

Acknowledging the “unique challenges for affected owners in the first year of the Underused Housing Tax”, the Canada Revenue Agency (CRA) announced on March 27, 2023, that penalties and interest for the 2022 calendar year will be waived for late-filed UHT returns and late-paid UHT payments, as long as the UHT return is filed and payment made before November 1, 2023. Such administrative relief effectively defers the UHT filing and payment date for the 2022 tax year to October 31, 2023.

The Underused Housing Tax (UHT) came into effect in 2022, imposing a tax of 1% of the value on any residential property declared as vacant and owned by any non-resident, non-Canadian. The UHT return filing and payment deadline is April 30th of the following taxation year, resulting in April 30, 2023, being the first UHT return filing deadline for the 2022 taxation year. Penalties for failure to file a UHT return are severe, including a minimum of $10,000 for corporations and a minimum of $5,000 for individuals.

At Bateman MacKay, we are still aiming to complete all of our clients’ UHT returns by April 30th.  If the UHT applies to you, we advise submitting all required information to Bateman MacKay a few weeks prior to the April 30th UHT return filing deadline. If you are unsure if the UHT applies to you and your residential properties, this reference chart may be of assistance in helping you determine if you need to file and pay the UHT and how to calculate the tax. If you have questions about the UHT or any corporate tax or accounting matter, contact a Bateman MacKay Business Advisor.

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