On March 27, 2023 Canada Revenue Agency (“CRA”) granted an extension of time to file UHT returns to October 31, 2023.
The CRA official announcement (see https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2023/underused-housing-tax-penalties-and-interest-waived.html) describes this as a “waiver of penalties and interest” for returns filed after the April 30, 2023 filing deadline as long as the returns are filed, and any tax owing is paid, by October 31, 2023. However, the practical reality is that many issues created by the legislation are difficult to interpret, and CRA requires more time to analyze these issues, develop their administrative policies, and publish those policies so that affected owners can apply CRA’s policies to their own situation and file their UHT return(s) accurately.
As a result of this extension being granted by CRA, our recommendations are:
- If you have a UHT filing requirement and there is no uncertainty in applying the law in your particular situation, then filing by the April 30, 2023 due date probably makes sense but is not essential. Filing by the October 31, 2023 extended deadline is essential to avoid penalties and interest.
- If there is any uncertainty about your UHT situation, then you should delay filing your UHT return(s) until the CRA issues published positions that give you certainty as to how CRA will apply the new law to your particular situation. Delaying your filing is probably prudent to make sure that the return is prepared accurately and takes into account any CRA published positions released over the next six months. Filing by the October 31, 2023 extended deadline is essential to avoid penalties and interest.
- If you are an individual who is not a citizen or a permanent resident of Canada and who needs to make an election with respect to a “qualifying occupancy” because you and/or your spouse own more than one residential property in Canada, you should still file your UHT returns by April 30 because the election due date has not been explicitly extended. Filing by the April 30, 2023 due date may be essential for your elections to be valid.
Please contact your D&H Group LLP advisor if you have any questions.
