Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
GST/HST Rulings Directorate
5th floor, Tower A, Place de Ville
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 246122
CRA Tax Identifier: N/A
Dear [Client]:
Subject: Underused housing tax (UHT) interpretation
Application of UHT to partnerships in Quebec
Thank you for your correspondence of [mm/dd/yyyy], concerning the application of the UHT to partnerships in Quebec.
All legislative references are to the Underused Housing Tax Act (UHTA) unless otherwise specified.
Based on your correspondence, we understand that:
1- Mr. A and Mr. B are brothers and are citizens of Canada.
2- Mr. A and Mr. B are the only partners of “A+B Partnership” (the Partnership).
3- The Partnership operates a farming business.
4- The Partnership owns farmland in the province of Quebec and a residential property is situated on that farmland.
5- The Partnership itself is identified as the legal (titled) owner of the farmland in the Quebec land registration system.
INTERPRETATION REQUESTED
You would like to know whether the Partnership would be the owner of the residential property that is situated on the farmland for purposes of UHT filing obligations.
In the case where the Partnership is not the owner of the residential property situated on the farmland, you would like to know whether Mr. A and Mr. B as partners of the Partnership have UHT filing obligations.
INTERPRETATION GIVEN
The Underused Housing Tax Notice UHTN15, Questions and Answers About the Underused Housing Tax, was published to provide questions and answers regarding the application of the UHT in various situations. Specifically, Question 1.3.1 of that notice is similar to your question and it provides clarifications to the scenario you provided. In addition, see the section “Additional information” of this letter for further information related to your question for 2023 and subsequent years.
Here is the response to Question 1.3.1:
Where a partnership constituted in Quebec is identified as an owner in respect of a residential property in the Quebec land register on December 31 of a calendar year, it is the Canada Revenue Agency’s (CRA) position that the following persons could reasonably be considered to be an owner of the residential property for UHT purposes:
* if the contract of partnership indicates that a specific partner is (or that specific partners are) an owner of the residential property, that specific partner or those specific partners
* if the contract of partnership does not indicate that a specific partner is (or that specific partners are) an owner of the residential property:
o if the partnership is a general partnership or a limited liability partnership, each person that is a partner of the partnership on December 31 of the calendar year
o if the partnership is a limited partnership, each person that is a general partner of the partnership on December 31 of the calendar year
However, where one or more partners of a partnership constituted in Quebec is identified as an owner in respect of a residential property in the Quebec land register on December 31 of a calendar year, it is the CRA’s position that that partner is (or those partners are) an owner of the residential property for UHT purposes.
As we are not in possession of all of the pertinent facts relating to the contract of partnership (i.e., the type of contract of partnership), we cannot make a determination as to how the UHT filing obligation apply to Mr. A and Mr. B as partners of the Partnership.
ADDITIONAL INFORMATION
The UHTA was amended by Bill C-69 which received royal assent on June 20, 2024. Among other things, Bill C-69 amends the definition of “excluded owner” to include more persons as excluded owners. This amendment applies to the 2023 and subsequent calendar years.
The following are examples of individuals who would be excluded owners for UHT purposes for the 2023 and subsequent calendar years:
* an individual who is a citizen or permanent resident of Canada and who is an owner of a residential property in any of the following capacities:
o as an individual in their own right;
o as a personal representative of a deceased individual; or
o as a partner of partnership that is a specified Canadian partnership (new excluded owner);
Generally, an excluded owner would not have to file a UHT return or pay the UHT for the residential property for the calendar year.
For more information about the amendments to the definition of “excluded owner,” please refer to Underused Housing Tax Notice UHTN1, Introduction to the Underused Housing Tax, which can be found on the Canada.ca website.
DISCLAIMER
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, the interpretation given in this letter, including any additional information, is not a ruling and does not bind the CRA with respect to a particular situation. Future changes to the UHTA, regulations, or the CRA’s interpretative policy could affect the interpretation, or the additional information provided herein.
CONTACT
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-296-9615.
Sincerely,
Zahra Sylla
Senior Rulings Officer
Real Property - Specialty Tax Unit
Financial Institutions and Real Property Division
GST/HST Rulings Directorate
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