New Tax Proposed for Non-Residents Owners of Canadian Real Property
In the Federal Budget presented in April 2021, the government proposed a vacant homes tax that was intended to deter non-residents from passively investing their wealth in Canadian real estate.
On August 6, 2021, the Underused Housing Tax (UHT) was proposed (effective on January 1, 2022) which entails an annual 1% UHT to be levied on vacant or underused residential real estate owned by non-residents of Canada.
Under this proposed framework, the UHT for a calendar year would apply to residential properties owned on December 31, 2021. Any residential property owner who is not exempt will be required to file an annual declaration with Canada Revenue Agency (CRA) each calendar year.
For further details on the UHT, we urge you to read the full article (written by RSM Canada LLP).