In response to the hyper-white-hot housing market that Canada was experiencing, the Government of Canada implemented the little-known, Underused Housing Tax (UHT) on January 1st, 2023. What does this mean for you as a Whistler property owner, you may ask? In this blog post, I will walk you through what we know of this new Housing Tax, who it affects, and what your next steps should be.
Not into reading? No worries! Check out my Youtube Video where I walk you through all of the ins and out's of the Underused Housing Tax:
As stated by The Government of Canada, the UHT is an annual 1% tax on the ownership of "vacant or underused" housing in Canada that took effect on January 1, 2023. The tax usually applies to non-resident, non-Canadian owners. There are situations, however, where the tax or reporting obligations could apply to Canadian citizens or residents, so it is important to understand whether you are an excluded or affected owner based on your specific situation.
When being considered for the UHT, property owners can be grouped into 3 separate categories:
- Excluded owners who are not required to file such as a Vancouver owner of a weekend home in Whistler.
- Affected owners, such as a foreign property owner in Whistler must file, but qualify for an exemption and thus not be required to pay the tax. Such an exemption would be if your property is occupied by you personally for 28 days minimum. Or if it’s rented out commercially for the year.
- Affected owners, such as a foreign owner of property in Whistler who must file and pay the tax because their property is sitting unoccupied and not used for the required minimum of 28 days per year.
Generally speaking, Canadians who own property personally (i.e. not through a partnership, corporation, or trust) are excluded owners and do not have to file for the UHT. In the case scenario that you are a Canadian affected by the UHT, there are many circumstances in which you can be exempt. For example, when a property is owned by a Canadian corporation, owners may be exempt from paying the tax, but still must file the appropriate documentation or face fines of $5000+.
There are many different types of exemptions for the UHT, such as exemptions that may apply based on where your property is located. Similar to Canada’s Foreign Buyer’s Ban, properties located outside of Census Metropolitan Areas and Census Agglomerations (i.e. properties in Whistler and Pemberton) are eligible for exclusions, but their owners may still be required to file to obtain that exemption.
So, what does this mean for you? In general, the application of the Underused Housing Tax is quite complicated and because I'm a realtor and NOT an accountant, we recommend that you talk to your tax accountant about how it may impact you and your Whistler or Pemberton property. Filings for the 2022 tax year are due April 30, 2023.
Helpful resources to better understand Canada’s Underused Housing Tax:
With reference to Whistler Real Estate Co.