TAX ALERT – NEW UNDERUSDED HOUSING TAX
POTENTIAL $10,000 LATE FILING PENALTY
DEADLINE TO FILE – OCTOBER 31, 2023
You will likely need to file a UHT return if you own residential real estate:
- Inside a company
- In a business partnership
- Registered in your name for the benefit of another person (held in trust)
Detailed information:
The Underused Housing Tax (UHT) is a new annual tax filing requirement due October 31st that could result in a late-filing penalty of up to $10,000 and may result in a tax owing of 1% of the taxable value of the residential property.
We have provided additional information below. If you think you might be required to file a return please contact our office so that we can review and determine if a return needs to be filed by October 31st.
The UHT is being levied by the federal government and generally applies to foreign national owners of residential housing in Canada. However, in many situations, a tax return is required to be filed by Canadian owners of residential property even though there may be no tax owing.
The following types of owners are not required to file a UHT return:
- An individual who is a Canadian citizen or permanent resident that owns their property either (a) on their own or (b) as part of a co-ownership
The following types of owners are required to file a UHT return but will likely not owe tax:
- A corporation owned by a Canadian resident
- An individual that owns the residential property in Trust for another individual
- Note this can include parents who are on title of their children’s property for financing purposes and children who are on title of their parent’s property for estate planning purposes
- An individual that owns residential property in a partnership with another individual
The above is a high-level overview of the filing requirements and the rules are complex. If you think you might be an affected owner who has to file a return we recommend that you reach out to our office to discuss immediately so that we can review and determine if a return needs to be filed by October 31st.
We ask that if you have any additional questions or would like additional information that you reach out to Ries Vahrmeyer at 905-374-6555 x216.
Additional information can be found on CRA’s website posted below.
Please note that this is an annual return and for the first year the tax filing deadline is October 31st however, all subsequent filings will be due April 30th.
TAX ALERT – NEW TRUST REPORTING RULES
POTENTIAL $2,500 LATE FILING PENALTY
DEADLINE TO FILE – MARCH 31, 2024
If you own property registered in your name but for the benefit of another person you will likely be required to file a Trust return by March 31, 2024. Please review additional detail below
Detailed Info:
Previously not all Trusts were required to file a tax return however, if you are on title to property that is for the benefit of another person you may now be required to file a Trust return for the years ending on or after December 31, 2023.
Some common examples of Trust returns that will now need to be filed include:
- Parents who were on title of their child’s residential property for financing purposes
- Children who were on title their parent’s residential property, bank accounts or investment accounts for estate planning purposes
For failing to file the Trust return the penalties will be equal to $25 for each day, with a minimum penalty of $100 and a maximum penalty of $2,500. An additional penalty could be levied on top of this amount for 5% of the maximum value of property held during the year by the trust with a minimum penalty of $2,500.
The above is a high-level overview of the filing requirements and the rules are complex. If you think you might have to file a return we recommend that you reach out to our office to discuss immediately so that we can review and determine if a return needs to be filed by March 31, 2024.
We ask that if you have any additional questions or would like additional information that you reach out to Ries Vahrmeyer at 905-374-6555 x216.
Additional information can be found on CRA’s website posted below:
Please note that this is an annual return and it will be required to be filed every year.
Steinbachs & Chapelle is a full service public accounting firm operating in Niagara Falls, Ontario. Our firm has been providing quality professional services to our clients in the Niagara Region and across the country for over 25 years.
Our dedicated professionals have extensive experience providing a full range of accounting, taxation and financial services, including, but not limited to; financial statement preparation, audit and assurance, personal, corporate and estate tax services, business advisory, and many more.
As a firm, we are dedicated to making sure our clients receive the highest quality services, specifically tailored to their needs, to help them achieve their business and financial goals. We pride ourselves on our commitment to our clients.
