Underused Housing Tax Act (S.C. 2022, c. 5, s. 10)

Marginal note:Meaning of administration or enforcement of this Act

3 For greater certainty, a reference in this Act to the administration or enforcement of this Act includes the collection of any amount payable under this Act.

Marginal note:Arm’s length

• 4 (1) For the purposes of this Act,

  • (a) related persons are deemed not to deal with each other at arm’s length; and

  • (b) it is a question of fact whether persons not related to each other are, at any particular time, dealing with each other at arm’s length.

• Marginal note:Related persons

  (2) For the purposes of this Act, persons are deemed to be related to each other if they are related persons within the meaning of subsections 251(2) to (6) of the Income Tax Act.

• Marginal note:Partnership

  (3) For the purposes of this Act, a member of a partnership is deemed to be related to the partnership.

Marginal note:Owner — multiple capacities

4.1 If a person is an owner of a residential property in the person’s capacity as a partner of a partnership or a trustee of a trust, this Act applies to the person as if the person were a separate person in respect of

• (a) each partnership for which the person is an owner of the residential property in the person’s capacity as a partner of the partnership;

• (b) each trust for which the person is an owner of the residential property in the person’s capacity as a trustee of the trust; and

• (c) all other capacities in which the person is an owner of the residential property.

PART 2Her Majesty

Marginal note:Binding on Her Majesty

5 This Act is binding on Her Majesty in right of Canada or a province.

PART 3Application of Tax

Marginal note:Meaning of qualifying occupancy period

• 6 (1) In this section, qualifying occupancy period, in respect of a residential property in relation to an owner of the residential property, means a period of at least one month in a calendar year during which one of the following individuals (other than an individual that is an excluded individual pursuant to paragraph (10)(b) or a prescribed individual) has continuous occupancy of a dwelling unit that is part of the residential property:

  • (a) an individual who deals at arm’s length with the owner and with any spouse or common-law partner of the owner and who is given continuous occupancy of the dwelling unit under an agreement evidenced in writing;

  • (b) an individual who does not deal at arm’s length with the owner or with any spouse or common-law partner of the owner and who is given continuous occupancy of the dwelling unit under an agreement evidenced in writing and for consideration that is not below the fair rent for the residential property, prorated for the period;

  • (c) an individual who is the owner or the owner’s spouse or common-law partner, who is in Canada for the purpose of pursuing authorized work under a Canadian work permit and who occupies the dwelling unit in relation to that purpose;

  • (d) an individual who is a spouse, common-law partner, parent or child of the owner and who is a citizen or permanent resident; or

  • (e) a prescribed individual.

• Marginal note:Exclusion — qualifying occupancy period

  (2) Despite subsection (1), a qualifying occupancy period does not include a period that is a calendar month during which the only individuals who have continuous occupancy of a dwelling unit are the owner or a spouse, common-law partner, parent or child of the owner, if each of those individuals resides or lodges at a place other than the residential property for an equal or greater number of days than the number of days that they reside or lodge at the residential property.

• Marginal note:Tax payable

  (3) Subject to this Act, every person that, on December 31 of a calendar year, is an owner of a residential property (other than an excluded owner of the residential property) must pay to His Majesty in right of Canada tax in respect of the residential property for the calendar year in the amount determined by the formula

  A × B × C

  where

  A

  is 1%;

  B

  is

  • (a) if the person has filed an election made under subsection (4) in respect of the residential property for the calendar year, the fair market value of the residential property, or

  • (b) in any other case, the taxable value in respect of the residential property; and

  C

  is the ownership percentage in respect of the person in respect of the residential property for the calendar year.

• Marginal note:Election for fair market value

  (4) For the purpose of determining the tax under subsection (3) in respect of a residential property for a calendar year, a person may elect to use the fair market value of the residential property, as determined in a manner satisfactory to the Minister, at any time on or after January 1 of the calendar year and on or before April 30 of the following calendar year.

• Marginal note:Form and manner of filing

  (5) An election under subsection (4) in respect of a residential property for a calendar year is to be made in prescribed form containing prescribed information and is to be filed with the Minister in prescribed manner on or before

  • (a) April 30 of the following calendar year; or

  • (b) any later day that the Minister may allow.

• Marginal note:When tax required to be paid

  (6) The tax payable by a person under subsection (3) in respect of a residential property for a calendar year must be paid by the person to the Receiver General on or before April 30 of the following calendar year.

• Marginal note:Tax not payable

  (7) No tax is payable under subsection (3) by a person in respect of a residential property (other than a prescribed residential property) for a calendar year if

  • (a) [Repealed, 2024, c. 17, s. 138]

  • (b) [Repealed, 2024, c. 17, s. 138]

  • (c) the residential property is not suitable for year-round use as a place of residence;

  • (d) the residential property is seasonally inaccessible because public access is not maintained year-round;

  • (e) the residential property is uninhabitable for a period of at least 60 consecutive days in the calendar year as a result of a disaster or hazardous condition caused by circumstances beyond the reasonable control of an owner of the residential property and this paragraph did not apply in respect of the same disaster or hazardous condition for more than one prior calendar year;

  • (f) a dwelling unit that is part of the residential property is uninhabitable for a period of at least 120 consecutive days in the calendar year as a result of a renovation to the residential property, any work in relation to the renovation is carried on without unreasonable delay and this paragraph did not apply in respect of the residential property for any of the nine prior calendar years;

  • (g) the person becomes an owner of the residential property in the calendar year and was never an owner of the residential property in the prior nine calendar years;

  • (h) the person died during the calendar year or the prior calendar year;

  • (i) the person is the personal representative in respect of a deceased individual who was an owner of the residential property during the calendar year or the prior calendar year and the person was not otherwise an owner of the residential property in either of those calendar years;

  • (j) the following conditions are met:

    • (i) an individual who was an owner of the residential property died during the calendar year or the prior calendar year and the individual’s ownership percentage in respect of the residential property at the time of death was at least 25%, and

    • (ii) the person was an owner of the residential property on the day the individual died;

  • (k) the construction of the residential property is not substantially completed before April of the calendar year;

  • (l) the construction of the residential property is substantially completed in January, February or March of the calendar year, the residential property is offered for sale to the public during the calendar year and the residential property had never been occupied by an individual as a place of residence or lodging during the calendar year;

  • (m) the residential property is located in a prescribed area and prescribed conditions, if any, are met; or

  • (n) the person is a prescribed person.

• Marginal note:Tax not payable — primary place of residence

  (8) Subject to subsection (10), no tax is payable under subsection (3) by an individual in respect of a residential property for a calendar year if a dwelling unit that is part of the residential property is, for the calendar year, the primary place of residence of

  • (a) the individual or the individual’s spouse or common-law partner; or

  • (b) a child, of the individual or the individual’s spouse or common-law partner, who occupies the dwelling unit for the purpose of authorized study at a designated learning institution as defined in section 211.1 of the Immigration and Refugee Protection Regulations.

• Marginal note:Tax not payable — qualifying occupancy

  (9) Subject to subsection (10), no tax is payable under subsection (3) by an owner of a residential property for a calendar year if the number of days during the calendar year that are included in a qualifying occupancy period in respect of the residential property in relation to the owner is 180 days or more. No single day is to be counted more than once in the determination of the number of days during the calendar year that are included in a qualifying occupancy period in respect of the residential property in relation to an owner.

• Marginal note:Exception — multiple residential properties

  (10) If, on December 31 of a calendar year, an individual who is neither a citizen nor a permanent resident is an owner of a particular residential property and either the individual or the individual’s spouse or common-law partner who is neither a citizen nor a permanent resident is an owner of one or more other residential properties (which particular and other residential properties are referred to as the “specified residential properties” in this subsection), the following rules apply:

  • (a) subsection (8) does not apply to the specified residential properties for the calendar year, other than the residential property in respect of which an election made under subsection (11) or (12) has been filed under subsection (13) in respect of the calendar year; and

  • (b) for the purposes of subsection (1), the individual and the individual’s spouse or common-law partner are excluded individuals in relation to an owner of any of the specified residential properties for the calendar year, other than the residential property in respect of which an election made under subsection (11) or (12) has been filed under subsection (13) in respect of the calendar year.

• Marginal note:Election

  (11) If, on December 31 of a calendar year, an individual who is neither a citizen nor a permanent resident is an owner of two or more residential properties and it is not the case that the individual has a spouse or common-law partner (other than a citizen or permanent resident) who is an owner of a residential property, the individual may elect to designate one of those residential properties for the calendar year for the purposes of subsection (10). Not more than one election may be made by the individual for the calendar year.

• Marginal note:Joint election

  (12) If, on December 31 of a calendar year, an individual who is neither a citizen nor a permanent resident and is an owner of one or more residential properties and the individual’s spouse or common-law partner who is neither a citizen nor a permanent resident is an owner of one or more residential properties, the individual and the individual’s spouse or common-law partner may jointly elect to designate one of those residential properties for the calendar year for the purposes of subsection (10). Not more than one joint election may be made by the individual and the individual’s spouse or common-law partner for the calendar year.

• Marginal note:Form and manner of filing

  (13) An election under subsection (11) or (12) to designate a residential property for a calendar year is to be made in prescribed form containing prescribed information and is to be filed with the Minister in prescribed manner on or before

  • (a) April 30 of the following calendar year; or

  • (b) any later day that the Minister may allow.

PART 4Returns

Marginal note:Return required

• 7 (1) A person that, on December 31 of a calendar year, is an owner of a residential property (other than an excluded owner of the residential property) is required to file a return for the residential property for the calendar year.

• Marginal note:Return not required — regulations

  (2) Despite subsection (1), a person is not required to file a return for a residential property for a calendar year if the person is a prescribed person or if the residential property is a prescribed property.

• Marginal note:Return required — regulations

  (3) Despite subsection (1), a person is required to file a return for a residential property for a calendar year if the person is a prescribed person.

Marginal note:Form and content

8 A person that is required under section 7 to file a return for a residential property for a calendar year must

• (a) make the return in prescribed form containing prescribed information and file it with the Minister in prescribed manner on or before April 30 of the following calendar year; and

• (b) indicate in the return the amount of tax, if any, determined by the formula in subsection 6(3) in respect of the residential property for the calendar year.

Marginal note:Definition of electronic filing

• 9 (1) For the purposes of this section, electronic filing means using electronic media in a manner specified in writing by the Minister.

• Marginal note:Electronic filing of return

  (2) The Minister may require that a return under this Act be filed by way of electronic filing.

• Marginal note:Acceptance

  (3) A return under this Act filed by way of electronic filing is deemed to be filed with the Minister on the day on which the Minister acknowledges acceptance of it.

Marginal note:Demand for return

10 The Minister may, on demand sent by the Minister, require a person to file, within any reasonable time stipulated in the demand, a return under this Act for any calendar year designated in the demand.

PART 5Trustees, Receivers and Representatives

Marginal note:Definitions

• 11 (1) The following definitions apply in this section.

  bankrupt

  bankrupt has the same meaning as in section 2 of the Bankruptcy and Insolvency Act. (failli)

  business

  business includes a part of a business. (entreprise)

  receiver

  receiver means a person that

  • (a) under the authority of a debenture, bond or other debt security, of a court order or of an Act of Parliament or of the legislature of a province, is empowered to operate or manage a business or a property of another person;

  • (b) is appointed by a trustee under a trust deed in respect of a debt security to exercise the authority of the trustee to manage or operate a business or a property of the debtor under the debt security;

  • (c) is appointed by a bank to act as an agent or mandatary of the bank in the exercise of the authority of the bank under subsection 426(3) of the Bank Act in respect of property of another person;

  • (d) is appointed as a liquidator to liquidate the assets of a corporation or to wind up the affairs of a corporation; or

  • (e) is appointed as a committee, guardian, curator, tutor or mandatary in case of incapacity with the authority to manage and care for the affairs and assets of an individual who is incapable of managing those affairs and assets.

  It includes a person that is appointed to exercise the authority of a creditor under a debenture, bond or other debt security to operate or manage a business or a property of another person, but, if a person is appointed to exercise the authority of a creditor under a debenture, bond or other debt security to operate or manage a business or a property of another person, it does not include that creditor. (séquestre)

  relevant assets

  relevant assets of a receiver means

  • (a) if the receiver’s authority relates to all the properties, businesses, affairs and assets of a person, all those properties, businesses, affairs and assets; and

  • (b) if the receiver’s authority relates to only part of the properties, businesses, affairs or assets of a person, that part of the properties, businesses, affairs or assets. (actif pertinent)

  representative

  representative means a person, other than a trustee in bankruptcy or a receiver, that is administering, winding up, controlling or otherwise dealing with any property, business, estate or succession of another person. (représentant)

• Marginal note:Trustee in bankruptcy — obligations

  (2) For the purposes of this Act, if on a particular day a person becomes a bankrupt,

  • (a) the trustee in bankruptcy, and not the person, is liable for the payment of any amount (other than an amount that relates solely to activities in which the person begins to engage on or after the particular day and to which the bankruptcy does not relate) that is required to be paid by the person under this Act, during the period beginning on the day immediately after the day on which the trustee became the trustee in bankruptcy of the person and ending on the day on which the discharge of the trustee is granted under the Bankruptcy and Insolvency Act, except that

    • (i) the trustee is liable for the payment of any amount that is required to be paid by the person under this Act after the particular day in respect of calendar years that ended on or before the particular day but only to the extent of the property of the person in possession of the trustee available to satisfy the liability,

    • (ii) the trustee is not liable for the payment of any amount for which a receiver is liable under subsection (3), and

    • (iii) the payment by the person of an amount in respect of the liability discharges the liability of the trustee to the extent of that amount;

  • (b) subject to paragraph (d), the trustee in bankruptcy must file with the Minister in the prescribed form and manner all returns in respect of the activities of the person to which the bankruptcy relates for the calendar years of the person ending in the period beginning on the day immediately after the particular day and ending on the day on which the discharge of the trustee is granted under the Bankruptcy and Insolvency Act and that are required under this Act to be filed by the person, as if those activities were the only activities of the person;

  • (c) subject to paragraph (d), if the person has not on or before the particular day filed a return required under this Act to be filed by the person for a calendar year of the person ending on or before the particular day, the trustee in bankruptcy must, unless the Minister waives in writing the requirement for the trustee to file the return, file with the Minister in the prescribed form and manner a return for that calendar year of the person; and

  • (d) if there is a receiver with authority in respect of any business, property, affairs or assets of the person, the trustee in bankruptcy is not required to include in any return any information that the receiver is required under subsection (3) to include in a return.

• Marginal note:Receiver’s obligations

  (3) For the purposes of this Act, if on a particular day a receiver is vested with authority to manage, operate, liquidate or wind up any business or property, or to manage and care for the affairs and assets, of a person,

  • (a) if the relevant assets of the receiver are a part and not all of the person’s businesses, properties, affairs or assets, the relevant assets of the receiver are deemed to be, throughout the period during which the receiver is acting as receiver of the person, separate from the remainder of the businesses, properties, affairs or assets of the person as though the relevant assets were businesses, properties, affairs or assets, as the case may be, of a separate person;

  • (b) the person and the receiver are jointly and severally, or solidarily, liable for the payment of any amount that is required to be paid by the person under this Act before or during the period during which the receiver is acting as receiver of the person to the extent that the amount can reasonably be considered to relate to the relevant assets of the receiver or to the businesses, properties, affairs or assets of the person that would have been the relevant assets of the receiver if the receiver had been acting as receiver of the person at the time the amount became payable except that

    • (i) the receiver is liable for the payment of any amount that is required to be paid by the person under this Act before that period only to the extent of the property of the person in possession or under the control and management of the receiver after

      • (A) satisfying the claims of creditors whose claims ranked, on the particular day, in priority to the claim of the Crown in respect of the amount, and

      • (B) paying any amounts that the receiver is required to pay to a trustee in bankruptcy of the person,

    • (ii) the person is not liable for the payment of any amount payable by the receiver, and

    • (iii) the payment by the person or the receiver of an amount in respect of the liability discharges the joint and several, or solidary, liability to the extent of that amount;

  • (c) the receiver must file with the Minister in the prescribed form and manner all returns in respect of the relevant assets of the receiver for calendar years ending in the period during which the receiver is acting as receiver and that are required under this Act to be made by the person, as if the relevant assets were the only businesses, properties, affairs and assets of the person; and

  • (d) if the person has not on or before the particular day filed a return required under this Act to be filed by the person for a calendar year of the person ending on or before the particular day, the receiver must, unless the Minister waives in writing the requirement for the receiver to file the return, file with the Minister in the prescribed form and manner a return for that calendar year that relates to the businesses, properties, affairs or assets of the person that would have been the relevant assets of the receiver if the receiver had been acting as receiver of the person during that calendar year.

• Marginal note:Certificates for receivers and representatives

  (4) Every receiver and representative that controls property of another person that is required to pay any amount under this Act must, before distributing the property to any person, obtain a certificate from the Minister certifying that the following amounts have been paid or that security for the payment of them has, in accordance with this Act, been accepted by the Minister:

  • (a) all amounts that are payable by the other person under this Act in respect of the calendar year during which the distribution is made, or any previous calendar year; and

  • (b) all amounts that are, or can reasonably be expected to become, payable under this Act by the representative or receiver in that capacity in respect of the calendar year during which the distribution is made, or any previous calendar year.

• Marginal note:Liability for failure to obtain certificate

  (5) Any receiver or representative that distributes property without obtaining a certificate in respect of the amounts referred to in subsection (4) is personally liable for the payment of those amounts to the extent of the value of the property so distributed.