October 1, 2023 - CCI-Nova Scotia Chapter News

News Flash Deadline 31 Oct 23: Your Condominium may need to file under the Underused Housing Tax

Canada's Underused Housing Tax was intended to catch foreign owners who were letting Canadian residential property lie empty, but the way it was written appears to catch many unintended property owners. This may include any condominium corporation that owns a residential property, such as a superintendent’s suite or a guest suite.

All owners of  “residential property” who are not “excluded persons” must file a return, whether or not they're liable to pay tax.  Essentially, excluded persons are individuals who are Canadian citizens or permanent residents of Canada.  Corporations (unless they are listed on a stock exchange), trusts, partnerships, or other entities are generally not excluded and must file.  A condominium corporation is not excluded and must file if it owns a residential unit, although it probably will not have to pay tax.  However, there are significant penalties - $10,000 for corporations – for those that fail to file the underused housing tax return, whether or not they are liable for any tax.

The return was originally due with the annual tax return, but the CRA has extended the penalty-free filing date to Oct 31.

If your condominium owns a residential property you should review the information on the CRA website:

https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax.html#

A superintendent’s suite or guest suite that is a condominium unit with its own PID is almost certainly a residential property.  A facility that is part of the common elements might or might not be, depending on several factors.  Your tax adviser can advise you on whether you are obliged to file and can assist you in making the filing.

CCI NS is currently investigating the matter and hopes to come up with a clearer understanding on what constitutes an excluded owner, affected owner, and if affected whether you are exempt from the tax but time is running short.  If you fit the above mentioned category of a super's or guest suite check with your Board and/or your property manager to see what if any action is being taken.