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British Columbia

Update on Underused Housing Tax and T3/Schedule 15 CRA requirements

UHT requirements for 2023

In January 2022, the federal government enacted legislation creating an Underused Housing Tax (UHT) of 1% on the ownership of vacant or underused housing in Canada. For those Strata/Condominium Corporations that own one or more of the registered units in their building (for example a guest suite or caretakers suite), a UHT return was required to be completed last year. In most cases, completing the return resulted in a nil tax balance owing.

The UHT form was originally going to be an annual return, however late last year the Act was amended to exempt Strata/Condominium Corporations from filing this return for 2023 if a 2022 return had been filed. The good news here is that if a 2022 return was filed, there will be no UHT returns filed this year and of course there will be no corresponding cost.

T3 Trust returns and schedule 15 reporting requirements

In December 2022, the federal government created new filing requirements for trusts to file a T3 tax return and Schedule 15 showing beneficiaries of those trusts. The deadline to file the 2023 return was April 2, 2024.

Penalties for not filing on time were $25.00 per day to a maximum of $2,500 per year. This requirement was meant to capture individuals and corporations using an Inter Vivos or bare trust arrangement to hold real estate and other investments. In late February, comments were received from our accountants that funds held “In Trust” with lawyers and Property Management companies may also have to file these returns on behalf of their clients.

We didn’t believe condo corporation trust accounts were included; however after obtaining a legal opinion, in March, 2024 we were advised otherwise. We immediately started work on preparing these returns and schedules and did meet the April 2 deadline, avoiding any penalties. You will notice a charge of $400.00 (plus GST) on your operating statements to cover these filings.

We are currently monitoring correspondence from the Canada Revenue Agency and are hopeful that, like the UHT issue above, that these returns will not have to be filed next year. We will of course keep everyone posted on this.