The “underused housing tax” (UHT) requirement is being newly implemented by the Canadian Revenue Agency (CRA) effective January 1, 2022. It affects tax returns currently being prepared for 2022.

The tax generally applies to non-Canadian, non-resident owners but unfortunately at this time there are certain types of affected owners who must file an annual “underused housing tax” form but will be exempt from paying the tax. 

Details in this link https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax.html

The extent to which the filing requirement applies to a farm will depend on the individual circumstances of each case.  The Ontario Federation of Agriculture (OFA) has posted a recording of its recent webinar on the issue which includes insights and guidance from accountants at BDO.  The webinar is available here: https://youtu.be/Lo32OXm-2go

Here are some Q&As based on the recent webinar and supplemental information from OFA:

Q.    If I am the sole proprietor of my properties, am I excluded from the new UHT requirement as long as I am a Canadian citizen or permanent resident?  

A.    Yes, as a sole proprietor you would be excluded from the requirement for all of your properties including bunkhouses that you own in your personal name, since you would fall under the “Excluded filers” category which is defined as follows: “An Individual who is a Canadian citizen or permanent resident who owns the property in their name.”

Q.   What about bunkhouses or TFW housing owned by a corporation or partnership?

A.    There is no clear guidance on this. Tax professionals have requested guidance from CRA on this matter  In the meantime, accountants are advising farm corporations and partnerships to file the UHT out of precaution until more information is available.

Q.   Can we do anything about this requirement? It is costly and burdensome.

A.   The new UHT requirement is not sector-specific. It applies to all Canadian corporations and partnerships. There have been resolutions passed at the FVGC and CFA AGMs in recent weeks to lobby CRA for a farming exemption from the filing requirement. OFVGA will provide updates on these advocacy efforts, but given the tight timelines of the filing requirement (April 30th) we are unsure if anything can be done for this tax year. 

In the meantime, farmers are encouraged to consult with their tax professional on how to proceed with respect to the UHT requirement for the 2022 tax year.

Source: Ontario Fruit & Vegetable Growers Association March 22, 2023 news release