Understanding the CRA Canada Underused Housing Tax

Carty Appraisals

484 Main Street, PO Box 446,
Winchester, ON, K0C 2K0
Tel: (613) 774-6195

As of January 1, 2022, a new tax called the Canada Underused Housing Tax has been implemented, which aims to encourage owners of underused residential properties to make them available in the market. But how do you prepare for this new tax obligation? Carty Appraisals can provide you with appraisal documents you need to meet the Canada Underused Housing Tax requirements. Stay compliant and avoid penalties by partnering with us for your home appraisal needs.

I. Introduction

The Canada Underused Housing Tax is a vital aspect of law in Canada, and it requires all property owners to maintain certain appraisal documents to avoid penalties. As of January 1, 2022, the Underused Housing Tax is now in effect for all non-resident, non-Canadian owners and certain Canadian owners. This tax is a yearly 1% levy on vacant, unused or underused housing throughout Canada. Its purpose is to better utilize our national housing resources.

To meet this obligation, assessing the fair market value of such properties becomes a critical task. Carty Appraisals offers its expertise by providing accurate and reliable appraisal documents that satisfy the compliance needs of the Canada Underused Housing Tax. With deep knowledge of the local property market and the intricacies of appraisal standards, our team of professional appraisers can provide homeowners with the necessary documentation to avoid any tax penalties or legal risks associated with noncompliance. The minimum penalty for failing to file a return ranges from $5,000 for individuals to $10,000 for corporations. Trust Carty Appraisals for timely and efficient appraisal services for your underused housing properties in Canada.

The Canada Underused Housing Tax is a crucial component of the Canadian housing market. It requires owners of underused residential properties to pay a tax on the value of their property as determined by a tax appraisal report. Home appraisal for Canada Underused Housing Tax is an essential service for property owners who need to comply with this regulation. Carty Appraisals offers this service to their clients and can provide them with the necessary appraisal documents required to meet the tax obligations. It is important to obtain a professional appraisal report, as it can help owners avoid penalties and stay in compliance with the law. Trusting a reputable appraisal company is key when dealing with such critical matters.

II. What are Canada Underused Housing Tax Appraisal Reports?

Canada’s Underused Housing Tax is a tax regime implemented January 1, 2022, designed to encourage the efficient use of residential properties in Canada. Under this tax regime, homeowners who own a residential property that is deemed unused or underused are subject to additional taxes. To comply with this law, homeowners must provide accurate appraisal reports to the Canada Revenue Agency. Carty Appraisals can provide you with these necessary appraisal reports. Don’t risk paying unnecessary taxes – contact us today for a high-quality appraisal document that protects your financial interests.

III. Who must file a return and pay the tax?

The following excerpt from the Services Canada website explains who is exempted or obligated to comply with this legislation:

If you are an excluded owner of a residential property in Canada, you have no obligations or liabilities under the Underused Housing Tax Act. An excluded owner includes, but is not limited to:

  • an individual who is a Canadian citizen or permanent resident – unless included in the list of affected owners below
  • any person – including an individual who is a Canadian citizen or permanent resident – that owns a residential property as a trustee of a mutual fund trust, real estate investment trust, or specified investment flow-through trust (SIFT) for Canadian income tax purposes
  • a Canadian corporation whose shares are listed on a Canadian stock exchange designated for Canadian income tax purposes
  • a registered charity for Canadian income tax purposes
  • a cooperative housing corporation for Canadian GST/HST purposes
  • an Indigenous governing body or a corporation wholly owned by an Indigenous governing body

If you are not an excluded owner we refer to you as an affected owner and you have obligations under the Underused Housing Tax Act for your residential property in Canada. An affected owner includes, but is not limited to:

  • an individual who is not a Canadian citizen or permanent resident
  • an individual who is a Canadian citizen or permanent resident and who owns a residential property as a trustee of a trust (other than as a personal representative of a deceased individual)
  • any person – including an individual who is a Canadian citizen or permanent resident – that owns a residential property as a partner of a partnership
  • a corporation that is incorporated outside Canada
  • a Canadian corporation whose shares are not listed on a Canadian stock exchange designated for Canadian income tax purposes
  • a Canadian corporation without share capital

If you are an affected owner, you must file an Underused Housing Tax return for each residential property that you own in Canada on December 31. You must also pay the Underused Housing Tax, unless your ownership qualifies for an exemption for the calendar year. Even if your ownership qualifies for an exemption, you must still file an Underused Housing Tax return for the calendar year.

IV. Carty Appraisals is a trusted partner for these appraisal reports

A return for the Underused Housing Tax must be accompanied by an appraisal report from a qualified appraiser. As a certified member of the Canadian National Association of Real Estate Appraisers (CNAREA), Carty Appraisals is a trusted partner for home appraisal reports, specifically for meeting the requirements of the Canada Underused Housing Tax. With years of experience and a team of expert appraisers, Carty Appraisals provides accurate and reliable property valuations, ensuring that clients receive the best possible results. Our company is known for our professionalism, attention to detail and commitment to customer satisfaction.

When it comes to the Canada Underused Housing Tax, Carty Appraisals understands the complexities involved and works diligently to provide clients with the right documentation. As a result, Carty Appraisals has established a strong reputation as a trusted partner for those seeking reliable and timely property appraisal reports.

V. The Process of Obtaining aN Appraisal Report from Carty Appraisals

The typical steps involved in obtaining an appraisal report include scheduling an on-site inspection, assessing the property features and condition, researching relevant local housing market trends, and completing a detailed report that meets all necessary appraisal standards. With our expertise in the industry and commitment to accuracy, you can trust Carty Appraisals for all your home appraisal needs. Timelines and pricing for Canada Underused Housing Tax appraisal are available upon request.  Contact us today for a quote and to learn more about our services.

VI. Summary

In conclusion, the Canada Underused Housing Tax is a significant policy initiative that requires homeowners to assess and report the value of their underused properties. To meet the regulatory requirements of this tax, engaging the services of a professional appraisal company like Carty Appraisals is an excellent idea. The team at Carty Appraisals has years of experience providing reliable appraisal services that adhere to industry standards and legal requirements. Their detailed appraisal documents will ensure that homeowners comply with the Canada Underused Housing Tax and avoid any potential penalties. With their professional, efficient, and accurate appraisals, you can be confident that you are receiving the highest level of service for your underused property valuation needs.