Canada: Housing tax obligations for charities, NPOs
Obligations under the underused housing tax rules due 30 April 2023
Obligations under the underused housing tax rules due 30 April 2023
Registered charities, public sector entities and non-profit organizations (NPOs) may have obligations under the underused housing tax (UHT) rules due 30 April 2023.
Although registered charities and many public sector entities are generally exempt from these new federal UHT requirements, they may still be affected when they indirectly hold reportable residential property through other entities in their structures, such as trusts or nominee corporations. In this case, the trustee or nominee corporation that holds the legal title to the property must file an annual UHT return for each reportable residential property and determine whether it is also liable for the 1% UHT.
KPMG observation
Note that NPOs and public sector entities that are not exempt under these rules must also determine whether they meet the filing and payment UHT obligations for property that they hold the legal title to directly. To meet this deadline for the 2022 calendar year, charities, public sector entities and NPOs need to identify all affected owners in their structures who owned reportable residential property on 31 December 2022, and provide these owners file a separate UHT return for each reportable residential property and, unless they meet one of several exemptions, pay any related UHT by 30 April 2023.
Entities that do not meet these new requirements may face significant penalties of at least $10,000* per property, even when no tax is ultimately payable.
Read a March 2023 report [PDF 201 KB] prepared by the KPMG member firm in Canada
*$=Canadian dollar
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