Underused Housing Tax: Explained
Understanding the Underused Housing Tax (UHT) for Whistler Property Owners
If you own residential property in Whistler, understanding the Underused Housing Tax (UHT) is crucial. This federally regulated annual tax applies to certain vacant or underused homes in Canada, and it may impact you depending on your ownership status. Let’s break it down in simple terms.
What is the UHT?
The UHT is a 1% annual tax on the ownership of certain vacant or underused residential properties in Canada. Effective since January 1, 2022, the tax primarily targets foreign nationals but can also apply to Canadian property owners under specific circumstances.
Types of Property Owners
Property owners are classified into three categories:
1. Excluded Owners
These individuals or entities are exempt from filing or paying the UHT.
2. Affected Owners
These owners must file a UHT return and pay the tax unless they qualify for an exemption.
3. Exempt Affected Owners
These owners must file a UHT return but don’t owe tax due to an exemption.
Am I an Excluded Owner?
If you fall under any of the following categories, you are an Excluded Owner and don’t have UHT obligations:
• A Canadian citizen or permanent resident (with some exceptions).
• A corporation listed on a Canadian stock exchange.
• A registered charity or Indigenous governing body.
• Owners of property under a mutual fund trust, real estate investment trust (REIT), or specified investment flow-through trust (SIFT).
Am I an Affected Owner?
If you don’t qualify as an Excluded Owner, you are an Affected Owner. This includes:
• Non-Canadian individuals.
• Canadians owning property as trustees (excluding personal representatives of deceased individuals).
• Partners in a partnership owning residential property.
• Corporations incorporated outside Canada or Canadian private corporations.
If you are an Affected Owner, you must file a UHT return for each property you own as of December 31, unless…..you are exempt!
EXEMPTIONS for Affected Owners
Even as an Affected Owner, you may qualify for exemptions. These depend on factors like ownership type, property use, and location.
1. Owner-Based Exemptions
• New property owners (first year only).
• Deceased owners or representatives of deceased owners.
• Specified Canadian corporations, partnerships, or trusts.
2. Property Availability Exemptions
• Newly constructed homes.
• Homes unsuitable for year-round use or seasonally inaccessible.
• Properties uninhabitable due to disasters or renovations.
3. Location-Based Exemption
Properties in resort areas, like Whistler, qualify for exemption if used by you or your spouse for at least 28 days per year.
4. Occupant-Based Exemption
The property may be exempt if it serves as:
• Your primary residence, or that of your spouse, child (in school), or a qualifying tenant.
• A rental property occupied for at least 180 days per year under a lease.
Key Deadlines and Requirements
1. Filing Deadline: April 30 of the following year.
• For the 2022 tax year, the deadline was April 30, 2023, with penalties waived until November 1, 2023.
2. What to File:
• Affected Owners must file a UHT return for each residential property, even if exempt.
3. Payment:
• If no exemption applies, the 1% tax is due by the filing deadline.
Why Whistler Owners Should Pay Attention
Properties in Whistler often fall into the vacation property exemption category due to their location in an eligible area. However, you still need to meet specific usage criteria (28 days per year) to qualify.
Need Help?
For tailored advice, consult your accountant or refer to the official resources below:
• Underused Housing Tax – Government of Canada
• UHT Return and Election Form – Canada Revenue Agency
Understanding your UHT obligations ensures compliance and avoids unnecessary penalties. If you’re looking to buy in Whistler, or already own here, we hope this guide helps you understand and navigate the process with confidence!
Reach out anytime here!
Julia and Ray
Team Longmuir Murray