Federal Government Releases Draft Underused Housing Tax Act
The newly proposed draft Underused Housing Tax Act (“UHTA”) is the first federal legislation aimed at countering real estate speculation and vacancy rates in Canadian real estate. The underused housing tax (“UHT”) has many similarities to British Columbia’s Speculation and Vacancy Tax; however, the UHT is aimed at vacant homes owned by foreign owners and does not apply to owners who are Canadian citizens or permanent residents — whether or not they reside in Canada.
It is proposed that the UHT will consist of an annual tax of 1% of a residential property’s taxable value unless exemptions apply. Canadian citizens or permanent residents, including personal representatives of a deceased individual, would be exempt unless they hold their interest through a partnership or trust. All non-exempt owners of residential property on December 31 of a tax year will be required to file a declaration by April 30 of the following year. If the legislation receives final approval, the tax will apply starting January 1, 2022 with the first declaration due April 30, 2023, subject to parliamentary amendments.
This is provided as information only and should not be construed as legal advice. You should consult with a lawyer to provide you with specific advice for your own situation.