Canada: Additional details on 1% federal tax on “underused” or vacant homes owned by non-residents
The new annual tax would apply beginning on 1 January 2022.
Additional details on 1% federal tax on “underused” or vacant homes owned by non-residents
The Department of Finance has provided additional details on a proposed annual 1% tax to be imposed on the value of “underused” or vacant homes owned by non-resident non-Canadians.
Legislation to implement the underused housing tax (UHT) is included in Bill C-8, which received first reading on 15 December 2021. The new annual tax would apply beginning on 1 January 2022.
The proposed legislation clarifies certain aspects of the UHT, and provides details on the legislative regime, some of which were outlined in Finance's public consultation on the proposed tax that ended in December 2021. Read TaxNewsFlash
Because the legislation contains references to certain “prescribed” entities and property, Finance may release regulations to further clarify how these rules would apply.
Underused housing tax
Affected owners would be required to remit this tax on or before 30 April of the following calendar year. This new tax generally would require owners (other than excluded owners) to file an annual prescribed return with the Canada Revenue Agency for each Canadian residential property they own, beginning with the 2022 calendar year (which would be due on or before 30 April 2023).
Read a January 2022 report prepared by the KPMG member firm in Canada
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.