{"id":474246,"date":"2023-10-31T15:54:04","date_gmt":"2023-10-31T19:54:04","guid":{"rendered":"https:\/\/www.investmentexecutive.com\/?p=474246"},"modified":"2024-03-29T11:03:11","modified_gmt":"2024-03-29T15:03:11","slug":"extended-uht-return-filing-deadline-closes","status":"publish","type":"post","link":"https:\/\/www.investmentexecutive.com\/news\/industry-news\/extended-uht-return-filing-deadline-closes\/","title":{"rendered":"CRA extends UHT return filing deadline until April"},"content":{"rendered":"<p>The Canada Revenue Agency (CRA) is giving affected homeowners a second extension to file an Underused Housing Tax return, making the announcement on the last day before the first extension was set to expire.<\/p>\n<p>On Tuesday, the CRA said it would waive the application of penalties and interest for any late-filed UHT returns and for late-paid UHT payable for the 2022 calendar year, provided the return is filed and the UHT paid by April 30, 2024.<\/p>\n<div style=\"margin: 1em 0;padding: 1em;background-color: #e4eef6\"><em>Want more immediate, memorable insights? <a href=\"https:\/\/www.investmentexecutive.com\/soundbites\/economy\/with-changing-regimes-investors-need-to-think-differently\/\">Listen to this Soundbites episode<\/a>, featuring Leonie MacCann of Irish Life Investment Managers. <\/em><\/div>\n<p>The CRA said the extension would allow more affected owners to meet their obligations.<\/p>\n<p>\u201cWe understand that many homeowners may not be aware that they are subject to this new law,” said National Revenue Minister <span class=\"nowrap\">Marie-Claude Bibeau in a release<\/span>. “This is why I want to ensure that every effort has been made to inform homeowners and help them meet their obligations.\u201d<\/p>\n<p>In March, <a href=\"https:\/\/www.investmentexecutive.com\/news\/cra-waives-penalties-for-late-filing-the-underused-housing-tax-return\/\">the CRA gave affected homeowners a six-month extension<\/a> beyond the official deadline of April 30 to file a UHT return and pay any UHT tax for the 2022 calendar year without incurring penalties and interest.<\/p>\n<p>One tax professional suggested the federal government might be experiencing difficulty behind the scenes in administering the UHT regime.<\/p>\n<p>\u201cThis is what happens when a policy sounds simple in concept but is actually really, really hard to implement effectively,” said Noah Sarna, a commodity tax partner with Thorsteinssons Tax Lawyers in Toronto, in a Linkedin post following the CRA\u2019s announcement.<\/p>\n<p>Effective for 2022, the UHT is an annual 1% tax on the ownership of vacant or underused housing in Canada.<\/p>\n<p>The tax applies to “affected owners,” including foreign and non-permanent resident owners of residential property in Canada, as well Canadians who own residential property through a trust, private corporation or partnership. Affected owners must file a return, but may be exempt from the tax itself if the property qualifies under a qualifying occupancy or other exemption.<\/p>\n<p>Penalties for late-filing a UHT return are significant: at least $5,000 for individuals, and $10,000 for corporations, for each residential property. If the UHT is payable, penalties may climb higher the later the return is filed, with no cap in the legislation.<\/p>\n<p>The CRA is currently <a href=\"https:\/\/www.advisor.ca\/tax\/tax-news\/cra-announces-prescribed-rate-for-q4\/\">charging 9% interest<\/a> on overdue tax, but that rate will <a href=\"https:\/\/www.investmentexecutive.com\/news\/cra-to-charge-10-interest-on-tax-owing\/\">increase to 10%<\/a> in the first quarter of 2024.<\/p>\n<p>Tax practitioners have been <a href=\"https:\/\/www.investmentexecutive.com\/news\/from-the-regulators\/feds-new-underused-housing-tax-wont-just-affect-foreign-owners\/\">sounding the alarm for months<\/a> that many Canadians may have a UHT filing requirement without knowing it.<\/p>\n<p>For example, if a child is put on title for a residential property by their parent who continues to live in the house as the beneficial owner, <a href=\"https:\/\/www.investmentexecutive.com\/newspaper_\/expanded-reporting-rules-for-bare-trusts-have-estate-practitioners-uneasy\/\">a bare trust arrangement is created<\/a>. Such transactions are often done for estate-planning purposes.<\/p>\n<p>As the property is owned by a trust, the trustee as the legal owner of the property must file a UHT return. However, if the parent is a Canadian citizen, the trust is considered a specified Canadian trust, and no UHT is payable.<\/p>\n<p>The UHT return could also represent a filing nightmare.<\/p>\n<p>For example, owners of multi-residential properties of more than three units are not subject to the UHT rules, meaning owners of apartment buildings do not typically have a UHT return filing requirement.<\/p>\n<p>However, where an affected owner (such as a foreigner or a trust or a private corporation) owns a multi-residential rental property where each unit has separate ownership and registered title (known as condominiumization), a UHT return must be filed for each unit, said Antony Schiefer, tax partner with KPMG, in a presentation given at the Canadian Tax Foundation’s Ontario Tax Conference on Oct. 24.<\/p>\n<p>“Three of my clients amount to about 5,000 tax returns that we have to file in respect of the UHT, [even though] there’s no tax to pay,” Schiefer said.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The second extension was announced on Tuesday afternoon<\/p>\n","protected":false},"author":176168,"featured_media":468139,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2312,2318],"tags":[2874,2637],"yst_prominent_words":[2170,5159,7291,8696,10019,11820,16462,28123,39498,87117],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/474246"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/176168"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=474246"}],"version-history":[{"count":7,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/474246\/revisions"}],"predecessor-version":[{"id":474497,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/474246\/revisions\/474497"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media\/468139"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=474246"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=474246"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=474246"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=474246"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}