The federal budget in 2021 announced a national annual 1% tax will apply on the value of non-resident, non-Canadian owned residential real estate that is considered to be vacant or underused. This is known to be the Underused Housing Tax (“UHT”). This was in effect as of January 1, 2022.
Who’s affected by this
Every homeowner that is NOT an excluded owner that owns a residential property on December 31 of the calendar year is required to file an annual declaration with CRA for each residential property that they own.
In general, excluded owners are individuals who are a Canadian citizen or permanent resident of Canada.
It is important to note that excluded individuals is not a test on whether the individual is a resident or non-resident of Canada for income tax purposes.
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