CRA Update to Underused Housing Tax Act

The Canada Revenue Agency (CRA) has recently announced a transitional relief measure for residential property owners who are affected by the new Underused Housing Tax Act. Under normal circumstances, these property owners would be required to file a UHT-2900 form by April 30. Although the form was introduced in January, there remains widespread confusion regarding the filing requirements, claiming exemptions, and paying taxes on properties owned as of December 31, 2022.

To address these concerns and offer relief to property owners, the government declared last night that any penalties and interest under the UHTA for the 2022 calendar year would be waived for late-filed underused housing tax (UHT) returns and late-paid UHT payables. This waiver will apply as long as the return is filed or the UHT is paid by October 31, 2023.

While the government stresses that the original deadline for filing the UHT return and paying the UHT payable remains April 30, 2023 (which, due to the date falling on a Sunday, would have been extended to Monday, May 1), they have confirmed that no penalties or interest will be applied for UHT returns and payments received by the CRA before November 1, 2023.

This announcement should provide some relief to residential property owners who are still struggling to understand the new Underused Housing Tax Act’s implications and requirements. It grants them additional time to seek professional advice and gather the necessary information to accurately file their UHT returns and make their tax payments.

Property owners are encouraged to take advantage of this extension and ensure that they fully understand their obligations under the new legislation. It is recommended that they consult with a tax professional or seek guidance from CRA resources to avoid any potential issues or misunderstandings that could arise from the new Underused Housing Tax Act.