CRA provides examples of the application of the UHTA exemptions for seasonal, inaccessible, renovated or recently-acquired residential properties
CRA has provided some simple examples illustrating the application of the exemptions from the UHTA tax (as a substantive matter, although there still is a return-filing obligation) under ss. 6(7)(c) to (g) of the UHTA regarding the ownership by non-resident/non-citizen owners of Canadian residential properties:
- A house lacking a central heating system, such as a furnace or boiler, or room heating sources, such as fireplaces or electric baseboard heaters is not suitable for year-round use as a place of residence (exempted under s. 6(7)(c)).
- A property fronting on a road which is impassable throughout the winter season is considered to be seasonally inaccessible (exempted under s. 6(7)(d)).
- Where the first unit in a duplex was renovated so that it was uninhabitable for 5 months in 2022 and there was a similar renovation of the second unit in 2023, because the (one-time) exemption under s. 6(7)(f) for a renovation had applied in 2022, it was not available in 2023.
- Two spouses (C and D) co-owned a property on December 31, 2022, with the interest of D having been acquired in 2022 from C, who had acquired 100% of the property in 2020 (the co-ownership interest of D is exempted under the s. 6(1)(g) exemption for a property acquired in the year– but not that of C).
Neal Armstrong. Summary of Underused Housing Tax Notice UHTN8 Special Rule and Elections for Individual Owners of Multiple Residential Properties under s. 6(10), summaries of UHTN9 Exemptions for Residential Properties That Cannot be Used Year-round under s. 6(7)(c) and s. 6(7)(d), summary of UHTN10 Exemptions for Uninhabitable Residential Properties under s. 6(7)(f) and summary of UHTN11 Exemption for New Owners under s. 6(7)(g).