For the 2022 tax year, the first-time home buyers’ amount is increased from $5,000 to $10,000, in respect of which you may qualify for a federal non-refundable tax credit of $1,500, if you purchased a home in the year and both of the following conditions apply:
The Toronto Vacant Home Tax (VHT) is an annual tax on vacant homes in Toronto, payable starting in 2023. The VHT now requires residential property owners to submit a declaration of their property’s status, starting with 2022. Homeowners who choose to keep their properties vacant will be subject to this tax, which is one percent of the Current Value Assessment (CVA) of the property. The VHT will be imposed on all Toronto residences that are declared, deemed or determined to be vacant for more than six months during the previous year.
Although all property owners are required to submit a declaration, the tax does not apply to the following properties:
The deadline to declare a property’s 2022 occupancy status is February 2, 2023. Speak to your Crowe Soberman advisor regarding the VHT filing requirement.
The Underused Housing Tax (UHT) is an annual 1 per cent tax on the ownership of vacant or underused housing in Canada that took effect on January 1, 2022. The UHT generally applies to individuals who are not Canadian citizens or permanent residents of Canada. In some situations, however, the tax can also apply to Canadian owners who are not considered an “excluded owner,” as discussed further below.
For affected owners, however, the tax will not apply if certain exemptions are met. For example, if the property is occupied by you or rented to an individual at fair value, in periods of at least one month that total 180 days or more in the calendar year, the property would not be considered “underused,” and no tax would apply. There are other exceptions that could apply as well.
The UHT tax return for a calendar year must be filed by April 30 of the following calendar year (i.e., if a UHT tax return is required to be filed for 2022, it must be filed by April 30, 2023). Only persons who meet the definition of an “excluded owner” are not subject to the UHT and have no obligations to file. All other types of owners must file a return, regardless of whether an exemption applies.
An “excluded owner” includes, but is not limited to:
As such, Canadian private corporations, Canadian partnerships and Canadian trusts who own residential property in Canada may have a requirement to file a return, even if an exemption applies and no tax is owing.
There are significant penalties if you fail to file a UHT tax return when it is due. Affected owners who are individuals are subject to a minimum penalty of $5,000. Affected owners that are corporations are subject to a minimum penalty of $10,000. These penalties can apply even where no UHT is owing. Speak to your Crowe Soberman advisor regarding the UHT filing requirement and whether it applies in your circumstance.
Tax Tips 2023
Tax Tips for Investors
Tax Tips for Employees
Tax Tips for Retirement Planning
Tax Tips for Professionals and Business Owners
Getting Ready for Tax Season
Important 2022 Tax Reporting Deadlines