A ban on foreign home buyers is not going to be effective: Chief economist
Editors note: The following story is an update to an earlier story from Oct. 23
The federal government has extended the deadline for homeowners affected by the Underused Housing Tax until the end of April 2024.
The government said in a news release Tuesday the extension will allow “more affected owners to meet their obligations.”
"The Underused Housing Tax is one part of our plan to combat the housing shortage,” National Revenue Minister Marie-Claude Bibeau said in the release. “We understand that many homeowners may not be aware that they are subject to this new law. This is why I want to ensure that every effort has been made to inform homeowners and help them meet their obligations.”
Investors of vacant homes originally had until the end of the day Tuesday to file for the added tax, which amounts to one per cent of the home’s market value.
The tax generally applies to foreign nationals with Canadian residential property, though the government said some Canadians and corporations may also face the tax.
“The object of the tax is to discourage foreign ownership of properties that are considered unproductive or vacant,” John Oakey, vice president of taxation at CPA Canada, told BNN Bloomberg in an interview last week.
Most Canadians are exempt from the tax, and foreign nationals looking for an exemption must explain why the property is unused.
“Maybe there’s a reason why you couldn’t use the property, because maybe it’s a seasonal property, or it was under major renovations,” Oakley said.
Affected investors will now have until April 30, 2024, to file for the tax and the Canada Revenue Agency will waive any late fees payable for the 2022 and 2023 calendar year, as long as the investor meets the new deadline, the government said.
Those missing the deadline could face fines of $5,000 or $10,000 for each property.