Right. And most rentals would not be considered businesses. So are we saying most rentals would NOT be required to file UHT election?
Wrong - it depends on the OWNERSHIP structure, not the use of the property, and each owner of ANY residential property needs to determine that.
âRentalâ is a use, not an ownership type - and the property need not be rented to fall under the aegis of the UHT.
A homeowner with an empty second property âsomewhereâ would also need to be considered. If the owner is a Canadian resident ⌠likely âexcludedâ. But a trust that owns that same property is probably (but not necessarily) an âaffected ownerâ.
Go back to the description by @centuryaccountants earlier in the thread. âRental propertyâ is simply the most likely form of property we will run acrossâŚbut it doesnât need to be rented to be captured for consideration.
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Yes I know what joint tenancy and tenancy in common mean. WK seemed to be saying any joint ownership that reports income needs to file UHT, as opposed to sole ownership.
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Okay, I should have said most jointly owned rental properties would not be considered partnerships/businesses
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Maybe âmost co-owned properties held by Canadian resident individualsâ.
Get that ârentalâ part out; it doesnât matter if itâs rented or notâŚbecause if a corporation were to own a non-rental property - itâs reportable. Or if a resident Canadian senior has an Alter Ego Trust that owns a portion of a residenceâŚitâs likely reportable (although I havenât been able to confirm that yet).
Itâs the âownership typeâ not the âuseâ that seems to matter, it appears.
And, to be fair, this is a garbage piece of legislation, poorly drafted and impossible to deal with on many fronts, but it served a political purpose for the party (and their pals) who passed it.
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I still find it funny and depressing at the same time, that public corporations like Brookfield, who own residential properties donât need to file the UHT return but CCPCs are required to do so. Like how does this fix Canadaâs housing shortage?? This looks like more of a failed PR stunt.
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So my farm clients - husband and wife - own everything jointly. This is a nightmare for me. They file taxes as a partnership so their accountant points to the partnership bit and says they need to file. They own a second house that is occupied by a farm employee who currently is not a Canadian citizen. The houses are part of farm property so will they really need to get an official appraisal to be able to fill out the form? So 2 houses - cost of appraisal minimum of $750 each. Then the CPA wants $1,000 for the first return plus $500 for each additional return. Two houses times two owners on each house is $2,500 plus $1,500 for apraisals is $4,000 to prove theat they donât need to pay the 1% tax. And this applies for all my farm customers. What a bonanza for CPAs and certified property appraisers. Plus CRA will need to hire many extra staff to process these paper filed returns. And it will not help our housing situation one iota.
I think I will just say that since partnerships cannot register land in Ontario, that these owners are excluded owners. I canât decipher government speak well enough to make any other decisions.
I used to think partners could not own property in Ontario, but it seems I was mistaken. I have seen Ontario deed registrations with Partner listed as the capacity in which they took title. (see attached).
I donât think you need appraisals. The UHT-2900 is not all that difficult to work through. I have completed a few of them already. I also have several farm partnerships with one or more dwellings.
I think you could have some liability issues if you simply ignore the filing and it is subsequently discovered they were required to complete the UHT returns. At very least you need to have them sign something to the effect they may need to complete these forms by April 30th and will need to find someone to do that for them.
Partnership Deed.pdf (534.7 KB)
I donât know if I am reading this right, I havenât started looking at this very seriously until I see all the posts on this topic. Partnership seems to be the greatest issue which is not what I am getting into.
For non-resident owner, who are Canadian, it doesnât seem to include those as affected owner, UHT doesnât seem to be applicable?
Excluded Owner:
- an individual who is a citizen or permanent resident of Canada, unless you are an owner of the residential property as either of the following:
- a trustee of a trust (except if you are the personal representative of a deceased individual, in which case you are an excluded owner of the residential property)
- a partner of a partnership
Affected Owners:
- individuals who are citizens or permanent residents of Canada and who are owners of residential property in Canada in either of the following capacities:
- as a trustee of a trust (other than as a personal representative of a deceased individual and other than as a trustee of a mutual fund trust, real estate investment trust or SIFT trust for Canadian income tax purposes)
- as a partner of a partnership
or the majority of private Canadian Corporations who own residential property⌠family farm corporations and the like. 
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Thanks, @snoplowguy - I was thinking the same thing, but it all just seems so unnecessary.
Or all the corps who rolled the rental into the corp but the corp isnât on title.
Super fun times for all!
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I have a UHT Question. I read through the above and it doesnât touch on it so perhaps a new thread?
I have a client that is a Canadian citizen, only owns one property in Canada. He has lived in the states for several years at this point but is still a tax resident because the treaty deems him to be resident due to having a house available for his use in Canada but not the US. He pays enough tax in the US that he doesnât end up paying anything to the CRA on his T1. His brother moved in to the house in early 2022 to house sit and lick his wounds after he divorced. The brother is not paying anything towards the upkeep of the house so I have not reported any rental income on my clientâs tax return. My client spent a week in the property visiting his brother in Nov 2022.
My question is does he have to file a UHT form? The client says no - he is a Canadian citizen that owns the property 100% and that makes him an exempted taxpayer which is what it says on the form instructions. I am not so certain and donât want to risk a $5,000 penalty down the road. I donât think he owes any tax since his brother is living in the house full time and is therefore not underused. I think he probably needs to file the form and claim an exemption for principal residence under Part 4 since he visited his brother in Nov 2022 for a week and stayed there so âlived inâ the house which would be enough to claim principal residence under those normal rules.
Thoughts on this situation? If you think he definitely needs to file a UHT return I need an official website or something I can refer to that confirms it one or the other and despite some searching I havenât found anything. Hoping someone else has!
excluded owner of a residential property for a calendar year means a person (other than a prescribed person) that is on December 31 of the calendar year
- (a) Her Majesty in right of Canada or a province or an agent of Her Majesty in right of Canada or a province;
- (b) an individual who is a citizen or permanent resident, except to the extent that the individual is an owner of the residential property in their capacity as a trustee of a trust (other than a personal representative in respect of a deceased individual) or as a partner of a partnership;
That would mean then that all my clients who are Canadian citizens donât need to file a return even if they have empty properties? I have one guy that had an empty condo all year in Edmonton that he was trying to rent/sell but bottom has fallen out of the market and he canât sell or rent it out . Heâs a Canadian citizen and lives in Calgary so he would not be subject to this then? That doesnât make sense if they are trying to charge tax on empty properties.
The impetus for this was to discourage foreign ownership - rich people who own houses all over the world; investing in residential property that could otherwise be used by Canadian residents.
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That is generally correct as long as the property is registered appropriately and the owner is not a âPartnerâ or a trustee; a screencap amalgamation of Baker Tillyâs flowchart and BDOâs comments are shown below for ease of combination â once you hit the first exit choiceâŚyouâre done.
What about non-resident Canadian Citizens?
@laurie ; The way the legislation is written it seems a Canadian Citizen is a Canadian Citizen regardless of the country in which they actually reside.
In other UHT trivia;
The official UHT legislation only uses the word âcitizenâ when it defines an excluded owner. We are expected to assume that citizen means âCanadian citizenâ but technically speaking everyone who is an individual is a citizen of somewhere? 
hmmmâŚ
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@Laurie, I have done a tax return for a non-resident Canadian citizen. This is how I understood UHT when I zoomed in to my client situation leaving non-relevant information out as follows âŚ
A) You are an excluded owner IF you are a Canadian citizen provided you are not a trustee or a partner
B) Affected owners of residential property are individuals who are NOT CITIZENS of Canada and who are owners of residential property in Canada in any capacity have to file an annual return.
Since my client was a Canadian citizen, not part of trust or partnership, therefore option A applies which automatically rules out option B. Thus, he is an excluded owner and is not an affected owner. As a result not required to file. Hope it helps.
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