PWC, "Tax Insights: The underused housing tax – A new compliance requirement for many owners of Canadian residential property", Issue 2023-06R, 5 April 2023

a building or condo unit is not a residential property until it is substantially completed

The GST/HST Rulings Directorate issued a technical interpretation to the Canadian Home Builders Association on March 10, 2023 indicating:

  • a property becomes “residential property” for UHT purposes when its construction is substantially completed (generally, 90% or more), so that it could be reasonably inhabited
  • a builder/owner is not required to file a UHT return for a calendar year in respect of a property if its construction was not substantially completed on December 31 of the year
  • a condominium complex does not have to be registered as such for its units to be regarded as “residential property” for UHT purposes, but an individual unit does have to be substantially completed by December 31 to require the builder/owner to file a UHT return in respect of the unit for that year
  • a property’s assessed value and most recent sale price do not have to be reported on a UHT return (“$0” can be entered on lines 280 and 285) if: (i) no tax is payable in respect of the property, due to an available exemption; and (ii) the UHT return is filed by December 31 of the following calendar year
no need to indicate assessed value on a timely-filed return if an exemption is available

The GST/HST Rulings Directorate is described as indicating in a technical interpretation issued on March 10, 2023 that “a property’s assessed value and most recent sale price do not have to be reported on a UHT return (“$0” can be entered on lines 280 and 285) if: (i) no tax is payable in respect of the property, due to an available exemption; and (ii) the UHT return is filed by December 31 of the following calendar year.”