Arnold Shuchat PREC Real Estate Blog


Pitfalls of the New Federal Underused Housing Tax

Under new Federal legislation which came into force on January 1, 2023, the “Underused Housing Tax”, if you are a company that owns “residential” property as defined in the Act, you are required to file a UHT return, (Underutilized Home Tax) by April 30 of each year regardless as to whether the property is taxable under the legislation, or face a potential penalty of a minimum of $10,000. The wording of the legislation seems not to exempt companies which own condominium units, each of which is a legally separate property, from having to file the return.  Imagine being reassessed 3 years later with $10,000 fines applicable to each unit for each year passed in a portfolio of strata property holdings when the actual property itself was NOT underutilized or not subject to the tax based on simply a failure to file?! Make a note of this and make sure your accountant and your clients are aware.

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