Underused housing tax extension

Confusion is frustrating the federal government’s attempts to implement its underused housing tax.

The proposed tax was the subject of bulletins and workshops earlier this year, when property owners faced a May 1 deadline for filing a nine-page declaration regarding their properties’ use.

But citing ignorance of the tax, the government gave a second extension this week on the deadline for filing declarations. Property owners will now have until April 30, 2024 to file declarations for 2022, as well as their declarations for 2023.

“This transitional relief will allow more affected owners to meet their obligations under this new law,” the Canada Revenue Agency stated in announcing the new deadline.

Several farm groups have hosted seminars in recent weeks to remind farm business owners of their obligations with respect to the tax.

The tax was part of a suite of measures that took effect January 1 with the aim of limiting foreign ownership of residential property. While the average Canadian citizen is excluded from paying the new tax and is exempt from filing requirements, private companies, partnerships and trusts owned 90% or more by Canadians – including farm businesses – must file declarations even if no tax is owing. Corporate entities face fines of $10,000 for not filing, in addition to any tax owing.

The tax amounts to 1% of the value of an “underused” residential property, with exemptions for recreational properties (recreational properties may be exempt if occupied 28 days a year or more).

To reduce the confusion and anxiety the tax has caused, the Chartered Professional Accountants Canada is urging the federal government to use the extension announced this week to reduce the reporting obligations for all Canadian entities, corporate as well as individual.

“We are hopeful that the government will use this additional time to make some improvements, such as excluding Canadian corporations, partnerships and trusts from the reporting obligations,” it said in a statement.

 

 

All content on this website is copyrighted, and cannot be republished or reproduced without permission.