Underused Housing Tax Act (UHT) in Canada: Who Needs to File and Pay?
ฝัง
- เผยแพร่เมื่อ 25 ก.ค. 2024
- If you're a residential property investor in Canada, you might be wondering about the Underused Housing Tax Act (UHT) and how it affects you. The Canadian Government implemented this tax law to prevent foreigners from hoarding residential properties and not making them available for rent to local Canadians.
However, there's been a lot of confusion about who has the Underused Housing Tax Act filing obligation and the tax payable.
In this video, we clarify everything you need to know about the Underused Housing Tax Act, including what kinds of residential properties are covered by the rule, who is required to file and pay the tax, owners excluded from the filing requirement, exemptions available for affected owners, and much more.
By the end of this video, you'll have a clear understanding of whether you need to file the Underused Housing Tax Act and how to do it.
Key Moments In This Episode
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00:00 - Intro
1:48 - Who does the Underused Housing Tax Act apply to?
2:45 - How to determine if you are required to file the Underused Housing Tax
4:16 - People who do not need to file the Underused Housing Tax
5:39 - Examples applicable to Canadian citizens with UHT filing obligations
7:38 - How to determine if you have a trustee relationship triggering UHT filing obligation
8:00 - Penalty for failing to file Underused Housing Tax
9:02 - Common scenarios that require Underused Housing Tax filing obligation
10:04 - How to determine whether you are a partnership or joint venture relationship
12:33 - Special rules around the underused housing Tax Act
17:03 - Underused Housing Tax filing deadline
#underusedhousingtaxact #UHT #taxfiling #Canadianresident #Canadiancitizen #taxfilingobligation #taxfilingrequirements #taxfilingdeadline #taxdeclaration #commercialproperty #residentialproperty #primaryresidence #singlefamilyhouse #duplex #triplex #condo #townhouse #semidetachedhouse #incometax #realestatetips #realestatetaxtips #Cherrychan
If you have any questions or thoughts after watching this video, leave a comment below, and I’ll respond as soon as possible.
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Feel free to check out our blog post for a detailed explanation as well: realestatetaxtips.ca/underused-housing-tax-act-applies-to-you/
Cherry, thank you very much for your explanation. It was well done for something that is very new and still not fully explained or understood, even by the accounting community. Looking forward to hearing you speak again in person some day.
Glad it was helpful! Thank you
Cherry, thank you for the detailed vedio.
Great job on the video, Cherry!!
Thank you!!
Thanks for the video - I would not mind sending you a few clients who might need your assistance in filing these forms- what would be the average cost for filing? Thanks
Thank you for explaining this. This UHT is confused like hell.
Hope this video clarified UHT for you
Great info!
Thank you!
Thank you for your videos Real Estate Tax Tips! I know you addressed this already but I am very frustrated because I contacted 3 different accountants here (Edmonton, AB) and they said they are not doing any UHTs for their clients because it ONLY applies to foreigners and not Canadian Citizens. None of my friends are filing but I am worried that we need to:
Before getting married, I had a home, with my name on title. After getting married, it was rented out. Now I have a house together with my wife on title as our primary. Do I need to file a UHT for that rental (we both report the income)
All of my friend's situations:
Their first primary residence is rented out when they bought a larger home aftter getting married. Each of my friends has 2-3 rental properties. They DO NOT report any rental income for the past 10 years because their accountants told them they do not need to report rental income. They also will not
file any UHT returns.
Accountants carry different meaning these days. It's hard to comment on what other people are doing.
Generally speaking, if you and your wife are operating as a partnership, sadly, CRA defines partnership is a very vague way, then each of you would have to file.
You can find out more about UHT using the following link - and yes they just had their last update in April as well...
www.canada.ca/en/revenue-agency/services/forms-publications/publications/uhtn15/questions-answers-underused-housing-tax.html
Hi Cherry thanks for the great video and a question do you file one on affected property or on all the property one’s own thanks
Affected property - for sure, the rest of them, it really goes back to whether you have an affected owners AND affected properties.
Not sure if I get your question right....
Thanks for the explanation. Where do we file if we own properties outside toronto?
Tesa, this form is available via CRA's website. Filing instruction is on CRA's website. Feel free to search for Underused Housing Tax on their website and follow their instruction - which gets updated quite frequently over the last two weeks.
Thank you for this video! Would this have to be filed for a primary residence as well?
You might have to do so if you are part of the affected owners
If two permanent resident own a property together (both on title for mortgage) do they also need to file UHT?
Cherry, your TH-cam channel has been very beneficial and informative - thank you!
I have a rental property where I am the only person on title for financial qualification purposes. There is a trust agreement in place whereby my spouse and her friend operate the rental property and claim 50/50 income and expenses to the CRA. I do not benefit from or operate the rental property in any way.
If I understand this correctly, I will need to file the UHT annually (as the trustee of a trust), but I am exempt from paying any tax?
If there's a trust agreement, sounds like you're a trustee... If you're a trustee, you're an affected owner - then you'll have filing obligation.
@@RealEstateTaxTips thank you for the clarification. It sounds like the beneficiaries of the trust agreement are excluded owners (no filing obligation), and because I own the property I am an affected owner (trustee of a trust).
I would have a UHT filing obligation, but because everyone involved in the trust are Canadians, I would be exempt from paying tax. Is that correct?
Cherry, thank you for creating such a detailed video explaining UHT. I have subscribed the channel:) Just have one question about my father's rental property. My father(non-Canadian resident) bought a property in East Gwillimbury, ON over 6 years ago and has been renting the property ever since taking ownership, he has been reporting rental income annually. That's his one and only property in Canada. In his case, does he still have to pay the UHT under the act? Your clarification is greatly appreaciated .
is he a canadian citizen? If he is one, then there's no filing obligation. If he's non canadian citizen, then he has to file - probably no tax to pay
@@RealEstateTaxTips No, he is not a Canadian citizen. I am and I have been filing taxes on his behalf upon being approved as his represenative from CRA.
My accountant sent me the form, and asked to file, no explanation no nothing. I knew you would have something on it and oh lord, 20 mins of detailed explanation. I think it’s time to consider moving my account to you….
My parents own a rental property which is joint in their name, I know they have to file UHT on that. However, they also own a primary residence which is also joint in their name. Do they have to file UTH on primary residence since now they own multiple properties? Thank you
Thanks for the video. I subscribed to your channel. My wife and I co-own our main resident and our rental property and both of us report the rental income every year as our income. We don't have an official partnership. This is probably the most common situation for most Canadians. 1) Do we still need to file the UHT? 2) if yes, do we have to also file for our primary place of residence? 3) If we have to file, we will be exempt from paying the tax as we have tenants with legal contracts living in the property a) and property b) is our main residence. Now for the purpose of filing can we use the price we paid to buy these houses or do we have to get an official appraisal? 4) If we are required to file, do my wife and I have to file separately and for each property or one filing is enough. I believe these are questions for a lot of Canadians. Thanks for helping us understand this new law better.
Hi, I am also in same situation. Did you find any answers to this ??
I wish there's a specific set of answers that I can provide - CRA did come out with more publication defining these relationships
www.canada.ca/en/revenue-agency/services/forms-publications/publications/uhtn15/questions-answers-underused-housing-tax.html
Generally speaking as long as you're Canadian permanent residents/citizens, you are exempted to pay the tax but you might have filing obligation.
If you are in doubt, my advice is to file - there's no penalty for over-filing, only if you don't file.
Thanks for sharing this! Hope you can give me some advice. I (non-resident) rented out a property for 2 months and I’m gonna report this rental income. At the same time, I used the property personally and it is in an eligible area. Do you think I can use vacation property exemption even though it is a rental property from CRA’s view?
Without going into your situation and knowing exactly where, it's hard to make a comment on this.
Great informative video. Thanks for that. The example you gave of you owning the property with yr husband is a great one. I have a couple of question if you have a chance to reply would be appreciated 1- If a Canadian person own the property only by having your name on title (therefore 0%) with the Canadian parents (50/50% ownership), the person who is owning it would be a deemed trustee therefore has a filing obligation. But do the parents also have an obligation to report? Are the parents considered to be in a partnership?
I recommend you schedule a consultation with one of our professionals to better understand your situation and provide you with the correct advice. You can call 416-548-4228 and schedule an appointment or reach out to us on www.realestatetaxtips.ca.
Hi Cherry - wow you said a lot in a short period of time. Thanks! Great information. I am just a bit confused about the scenario where Canadian residents are on title and trustees for a Canadian Corporation (corp reports income). Your video had a snippet that said both individuals on title AND the corp have to file. I completely understand how the individuals on title must each file since they are trustees but I can't see the rationale as to why the beneficial owner (not on title) has to file. I can't see how the listed affected owners include this corp. Where is the "exhaustive list" (since CRA always says their list is not "exhaustive")? ps: just for the record I'm exhausted :)
It's a confusing area of the act. It says private corporation requires to file... but it also says "owners" have to file. And definition of owners has a couple of meaning. It gets confusing and hence I said what I said...just so we could avoid the $10K penalty.
@@RealEstateTaxTips I guess it doesn't hurt to file just in case! There is no penalty for "over filing" !!! :)
I have a couple questions! So me and a friend bought a property back in march 2022( both canadian citizens) we flipped the property and it sold Feb 2023, at a large loss, there was just a verbal agreement on what we would contribute to the project. would we be required to file, we are both on title as 50/50 owners for the property or would we be considered a specified Canadian partnership?? Also do i need to file my own primary property as the form asks how many properties do you own? Thanks in advance!!
A determination of partnership or not is really dependent on case facts and intention too... if it is partnership, each partner has filing obligation.
I had thought if a person was added to the title on a property (like your husband was on yours), that both parties had to then include the revenue from that property on their individual returns - that there was no option to only declare this income on one owners return. Where can I find more information on this? It will affect me in a couple ways and have additional considerations due to this UHT policy as well. Thx!
This is a conversation you should have your accountant and lawyer potentially. I hope you had a chance to check out my interview with Milena Cardinal on trust relationship which could help you understand that relationship a bit better.
Hi Cherry thanks so much for your video. I am canadian citizen, non-resident, live outside of Canada right now, own a condo just by my own name, no other names, no others in trust, do I still need to file the UHT form? Thanks
Yes you are required to file the UHT
So basically if you are a canadian citizen in a Canadian real-estate partnership with someone else you need to file, correct?
Hi Cheryl, thank you for the video. just want to confirm, you have mentioned at 16:25 (owners of residential properties, foreign owners of res properties) do you mean both or just foreign owners? I do own townhouse and rent it out as an airbnb, im canadian citizen, and both me and my husband own the townhouse and we both claim expenses. are we exempted to file? or because its an airbnb, everyone needs to file? thank you
Annie, if you and your husband are both Canadian citizens and you are owning your properties together as partnership, then both you and your husband would have filing obligation.
If you and your husband are owning the properties as joint venture then chances are you may not have the filing obligation.
Yes, sorry it is very confusing.
Cherry thanks for this. Little confused on one thing. You mentioned adding Erwin to your property deed and erwin then being required to file UHT as he is now a trustee.
But later in the video your caption says "if both you and your spouse are on legal title and only one of you are reportinf income amd expense, both you and your spouse have to submit theUHT return.
Is this contradictory ?
Did I say that? I don't really remember now. If you and your spouse are both on legal title and you are acting as partners of partnership then yes you both have to file. If you are acting in the capacity of joint venture, then no UHT filing obligation. Hopefully that clarifies a bit.
Does the UHT apply to your home residence or only to the other properties such as vacation properties, and or rental properties
The UHT does not apply to your Principal Residence.
Very useful video! My wife and I own our residential unit as a partnership and wondering if I need to file the UHT tax form or not?
Partners of partnership are affected owners and have filing obligation of UHT
@@RealEstateTaxTips Thank you for your quick response! In fact, my wife and I have purchased the property as a co-ownership home!
@@fredrahmani6670 yes, you do have to prove that you are co-owners if CRA questions. Make sure you have supporting documentation.
Hello. First of all thank you for the video. I own a condo property my wife is not legal part of ownership. Does she need to file, too? We are both Canadian Citizens. Subbed
Sounds like (really should verify with legal doc, etc.) you're the trustee - and trustee would require filing - visit my blog which is in the pinned comment above - you might find useful examples there.
@@RealEstateTaxTips thank you
How long can we have the rental property empty in between tenants before this vacancy tax applies? What if we can’t find tenants for our rental?
Tesa, if you are a Canadian resident or citizen, you might already be exempted.
Thank you for this video. So it's not clear enought. A canadian permanent resident with his wife (permanent resident as well) jointly bought an appartment and rent it out. Are they in a partnership and required to file? And pay?
Yes it is not clear. If you have some agreement signed that’s a different story.
Thanks for the video! Great content! At time 10:26, tax tip you say - if both names on legal title and only one reporting income and expenses, both need to file. This is contradictory with your first example when you files your income and expenses 100% and both your names are on title and only your husband need so file. I am confused.
Great catch. If both husband and wife is on title, and only wife is reporting income (as in the case in my property), only my husband is filing. Hope it clarifies. Good luck.
@@RealEstateTaxTips Thanks for your reply. Actually when you add your husband to the title, spousal rollover rules would automatically apply so that the transaction occur at cost (no gain) and the spousal attribution rule would require you to report 100% income. So you husband is the true owner and does not need to file. Do you agree? Otherwise it is too tricky and it is not the legislation is intended to.
@@fengmao1031 I agree it isn't the intention of the legislation. We're still speaking to multiple accountants who in turns also spoke to CRA rep to clarify their legislative position.
As of right now, we can only make assumption.... and the deadline is fast approaching as well.
@@RealEstateTaxTips I mean if cra audits if ur husband had not filed it, you can always say you have transferred the rental property and cra will have nothing to say, right? For whatever purpose you do not want to transfer, cra is a different system.
@@Maomao2023 Capital gain tax would have been triggered, but that wasn't the case.
Hello Cherry, my husband and I have a rental property. We are both on the legal title/co-owner. I report 100% of rental income. Do either one of us have to file? Thanks
It's hard to tell given that we know very little about your situation and how it works between you and your husband. Best to consult with your accountant and describe that situation to him/her.
Are there exceptions for US owners who were unable to visit vacation cabin all 28 days due to a medical emergency?
Vacation home in 28 days calendar; so as long as I use it a total of 28 days in one year or it has to be 28 consecutive days?
Are you a Canadian resident/Canadian citizen to begin with? You might qualify for exemption under a different exemption criteria to begin with...
Interesting, Cherry. So I'm a Canadian citizen living in the USA. I have a small condo in a small ski resort in BC. It is solely owned by me. It is in an exempted area but last yr I was only able to spend 22 days there. Do I even have to file since I'm Canadian & do I owe?
Thanks for your help. Carla
Sounds like you're excluded owner altogether...without knowing all the details. Make sure you read through the CRA website to ensure you don't have any filing obligation.
Thank you so much. The more I read, the more confused I get. Hope the USA doesn't put in a retaliatory tax.
Great info! How about a Canadian citizen who became a non resident?
Canadian citizen who isn't owning property in the capacity of trustee/partnership doesn't seem to be an affected owner
@@RealEstateTaxTips Thank you! Subscribed~
Thank you, if the property was purchased in 2023, the deadline to file UHT will be in 2024?
Yes April 31, 2024
Hello nice video , I have two rental properties under my name sole owner do I still have to file ? I am Canadian citizen thanks
Yes you are still required to file the UHT
Great video! Very informative :) Just subscribed. One question I have is the meaning of "a partner of a partnership that owns a residential property" in the 'affected' owners. If my wife and her mom co-own the house that just my wife lives in, are they considered 'partners in a partnership'? Her mom doesn't live in the house, just owns it with her, so that her daughter had somewhere to live. According to the CRA a partnership is defined as the relation (or relationship) that subsists (or exists) between persons carrying on a business in common with a view to profit. My wife and her mom are not co-owning the home as a business or with any intent to profit. So, does that mean they are not 'partners of a partnership'? They then would be considered Excluded? Any insight on this would be amazing! :)
According to CRA, whether the relationship is considered partnership or not is purely based on fact surrounding the relationship... it is up for the court's judgement. This also creates a lot of confusion in our own professional community and unfortunately CRA has provided minimal guidance.
@@RealEstateTaxTips Our family has talked to two separate local certified accountants now and they both had the same confusion over the issue as you expressed in your reply. It's wild how confusing they've made this UHT. It also seems awfully wasteful of everyone's time and tax payer dollars to make people go through so many hurdles just to get an exemption. If it's an exemption when going through all those hurdles, then why not just make those exemption scenarios part of the category of 'excluded owner'? All this red tape, wasted time and tax payer money to process something that could be excluded, with the same result.
@@TillThenPlease there're steps you can do preventatively to support your position. Make sure you speak to your accountant that knows your situation to best advise you
What an absolute mess! Thanks for the video. Do we really think millions of Canadian home owners are going to be fined $5k? Talk about a guaranteed way to lose the next election!
So rentals in personal name, some husband only some husband and wife joint account both Canada citizens houses fully rented. Exempt from filing my understanding?
If you are affected owner, you would have to file. Also needs to see if you're operating everything as partnership or co-ownership, that would also make a difference.
realestatetaxtips.ca/underused-housing-tax-act-applies-to-you/
@@RealEstateTaxTips thanks for the video, if me and my husband are co-owners and both Canadian citizen we don't need to file?
@@zalenemail i have the same question. My husband and I are co owners and both Canadians on one rental property (single family home) fully rented last year. Do we have to file?
Thanks for the information! If I own properties under my name as a sole owner, and I also own properties under a corporation and am the only owner, I understand that I must file for the properties of the corporation, but not for the properties I have under my name, am I right?
Assuming these are different properties, the ones owned by you in your personal name and the ones owned by the corporation, then you have to report income & expenses in your personal names and corporation names as well. That's also assuming you live in Canada and I am only speaking from Canadian tax perspective.
@@RealEstateTaxTips Thanks for your response. Yes, the properties under my name, and under the corporation are different, and I am a Canadian citizen and resident of Canada. I was talking about the underused housing tax filing. Could you please confirm? Thanks in advance
@@sofialopez301 did you end up filing your UHT for properties under your personal name?
I am canada citizen and we have given our principal residence in mississauga on rent. Do we have any obligation to file something?
Watch the video - it goes back to your particular situation and the facts involved.
Did not set up family trust but have the declaration of trust with my daughter and she is beneficiary owner. Should I fil UHT?
Trustee is one of the affected owners that meet the filing obligation of UHT
@@RealEstateTaxTips did not set up the trust so why should we consider UHT?
Just for clarification, when you talk about these situations where your husband is a trustee, is your husband a Canadian citizen? Or does this only apply if your husband is not a Canadian citizen or permanent resident?
Husband is a trustee and also a Canadian citizens. He's still an affected owner. Still has the filing obligation.
For more detailed explanation - feel free to check out this blog post: realestatetaxtips.ca/underused-housing-tax-act-applies-to-you/
My siblings and I own a residential property as joint tenancy. Our parents live in it. Are we considered as “partner of a partnership” or co-owners? Thank you
You might have a capital gain issue down the road - depending no who truly contribute to the property. Best to consult with an accountant who knows your situation. Alternatively you're welcome to connect with our team.
Hi Cherry. Just want to confirm. We are husband and wife own the property 50/50, both our names on the title. Both of us are Canadians and residents of Canada. Both of us report income in our respective tax returns 50/50. Are we excluded owners and so no need to file UHT form?
Thank you.
Doesn't sound like you do...
Sorry, one caveat though, if you are operating as co-owner, then you have no filing obligation. If you are operating as partnership, then yes there's filing obligation
Just co-owner, not partnership... Thanks.
Is it good to buy investment property under cooperation?
I'm doing the exact presentation on whether you should setup a corporation tonight. Visit RealEstateTaxTips.ca to sign up.
IMHO, this is all becoming way too picayune and too intrusive by the Government of Canada. Imagine the number of people who will not file this correctly or who will omit this filing.. What then ?
The law does say that there is a penalty of $5k and $10k minimum, which is why we are so concerned 😟. I do agree wholeheartedly 100% that the intention and how the act is written are not consistent 🙁
How about 1% ownership? Entitle to file tax
If are affected owners, you still would need to file. If you are excluded owners, you don't have to file.
My husband and I own 2 properties, one we live in and the other we rent to my parents. Both our names are on the deeds. We are both Canadian citizens and live here. We file our taxes for the properties 50/50. I don't believe we have to file this. Help
You have a not so straight forward scenario here, I recommend that you schedule a consultation with our team so that we can fully understand your situation and provide you some guidance
Hi Cherry, I need an accountant. How do I contact you. Thank you
Hi Jane, please reach out to my office at realestatetaxtips.ca/contact-us/. Thanks!
My principal residence a semi has myself.and my wife and Cosignor my father in law do inhave to file
Maybe next time, explain exactly who is excluded and who is carved out from the get go?
Thank goodness the Underused Housing Tax Act is done for most Canadians.
{I don't have to fill out any forms correct ? I own my home 100% and lived in it daily for past 10 years. }.
I feel sorry for everyone out there with the ownerships of additional homes , cottage's or other homes for renting out. No wonder so many are on the market for-sale across Canada.
no you don't need to.
@@RealEstateTaxTips thanks . I didn’t think so but like a 2nd opinion. I did read all and this will cause many headaches for investors. I checked in my area within Alberta for licensed appraiser’s and nobody around. Closest was 3 hours away .
When the leader changes so are lots of laws in Canada or it will be its last leader of Canada you see on the map today. I can assure you b. C ports won’t be worth a dime when it happens
Government policies do have significant impact on many aspects of our lives.
What is said here? It's not too bad, however, when he says the form is not too bad we have
an incredible misread by the narrator. Questions are incredibly vague, either by intent or else they were construed by idiots. Is the end goal to get incorrect answers? That is was it seems to be designed to generate. Most married or unmarried couples have joint names on their property titles. Yes, no?? Does that mean they are all subject to the UHT questionnaire? What we have here is bureaucratic intrusion at the highest lev els and a complete governmental failure. I.e. bullshit. I am 73 years old I am quite ordinary. I suppose I must add I am Canadian. Incredibly dismayed. I do not wish to be crucified by fools which is what is happening! This old man says this SUCKS!!
Oh I wholeheartedly agree with you that this is ridiculous