Last Updated on March 10, 2023 by Nasir Hanif
When you are living in a country, it is important to know all the mandatory taxes in that country. Not paying your taxes can cause a lot of legal problems for you, so it is better to be knowledgeable about it. The Underused Housing tax is one of the most important taxes to understand if you are a property owner in Canada. The tax was started in 2022. Not everyone has to pay this tax, as there are some people who qualify for an exemption.
Who Is Exempt From The Underused Housing Tax?
Exemptions of the Underused Housing Tax depend on a few factors. These include:
1. Owner Type
Residential property owners who are exempt from paying this tax include:
- Deceased owners
- If there is a new owner on the calendar
- Specified Canadian corporations
- Partners or trustees of specified Canadian partnerships and trusts
If you fall under any of these owner types, then you are exempt from the tax. Keep in mind that you will still file for the tax, but you don’t have to pay the amount.
2. Use And Location Of Property
If you have ever wondered if your property’s location affects the tax exemption status then you aren’t alone. Many people think about this, and when you start researching on the topic you find out that there are locations in Canada where this tax is not present. So if your property is located there and you spend at least 28 days in that property in one year, then you are in luck with getting an exemption. The property can also be used by your family members to qualify for this exemption.
3. Residential Property Availability
Another factor that will affect the exemption of the Underused Housing Tax will be availability. You might be exempt if:
- You have just constructed the residential property
- The property is only accessible in certain seasons
- You can’t live in the property all year because it is not suitable
- You can’t live on the property because of renovations or dangerous conditions or a disaster
If you can’t live in the property or access it for certain reasons, then you will also be exempt from the Underused Housing Tax.
If the property under question is your primary place of residence or if it is considered as a primary place of residence for any of your family members, then this can lead to a tax exemption. In order to qualify for the tax exemption, you must have to stay at the property for at least a moment.
The above-mentioned factors are the things that can make people exempt from the Underused Housing Tax. If you are not sure about anything, then you should hire a professional accountant to help you out with all your tax filing requirements.
It is important for you to understand all these things before you start to file your taxes. You might face some issues at the start, but over time you will start complying with the policies and make fewer mistakes.