Canada's underused housing tax is a measure that was introduced by the federal government to discourage speculative activity in the housing market. The tax applies to residential properties that are not used as primary residences, but rather are purchased and left vacant or used as investment properties.

Despite the importance of this tax, it is often overlooked by property owners and investors. According to a report by the Canada Revenue Agency, only 2,200 taxpayers declared the underused housing tax in 2018, out of an estimated 300,000 potential taxpayers.

The underused housing tax is levied on properties that are not occupied for more than six months of the year. The tax rate is 1% of the property's assessed value, and it is calculated on a pro-rated basis, depending on the number of days the property is vacant.

The purpose of this tax is to encourage the use of residential properties as primary residences, and to discourage the purchase of properties solely for investment purposes. By discouraging speculation in the housing market, the government hopes to stabilize prices and make housing more affordable for Canadian residents.

The low rate of tax disclosure for this measure indicates that many property owners and investors are not aware of its existence, or are choosing not to comply with it. This lack of compliance can have serious consequences, including penalties and interest charges, as well as potential legal action.

The Canada Revenue Agency has launched a campaign to increase awareness of the underused housing tax, and to encourage taxpayers to declare their properties. This campaign includes targeted advertising, as well as outreach to tax professionals and industry associations.

If you own a residential property in Canada that is not used as your primary residence, it is important to understand your tax obligations. The underused housing tax is a significant measure that can have a significant impact on your tax liability, and failure to comply with it can result in serious consequences.

Take the time to learn about the underused housing tax, and to ensure that you are in compliance with this important measure. By doing so, you can help to stabilize the housing market, and contribute to the long-term health of the Canadian economy.

Read more at : https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax.html

Read more at : https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/uht-2900.html

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Disclaimer: This article only provides general information which is not construed as professional advice. Readers seeking professional advice must consult an experienced and a qualified professional in the respective field.