I just attended a CFIB webinar where they had CRA staff answer questions related to the UHT. It was quite informative. In particular, the CRA went on record to state that spouses who jointly own a rental property (or any property) are NOT considered to be in a partnership unless there is some “business” aspect to the partnership. Simply “owning” a part of the property does not make one a partner. They also clarified some issues related to ownership through a trust or a bare trust. References were made to the latest Tax Notice (UHTN15) posted in April:
CRA also announced that they are working with tax software providers to enable e-filing the UHT-2900 - expect early 2024 (in time to file for the 2023 tax year).
Hi Nezzer, Can you please provide more feedback about the “business” part of a rental property. If the property is a rental, would it not be considered a business? Thank you for the clarification!
Rental Income is generally considered passive income, not business income - unless they are in the business of renting properties, ie 5 or more I believe. That is position that I am taking with respect to a situation in which a couple has a single rental property.
If you provide additional services to tenants, such as cleaning, security and meals, you may be carrying on a business. The more services you provide, the greater the chance that your rental operation is a business.
There was a recent court case where the CRA had determined that AirB&Bs were classified as a business not as a rental property.
@marina - LOL - I’ve never worked at CRA, and I don’t make the rules, so I couldn’t tell you what CRA considers “business” vs co-owners of a rental property. But, as @GuyWhoPlaysGolf pointed out, it’s probably where you provide more services to the tenant than just a place to live. I wonder how they might look at it if you mow the lawn or shovel snow once in a while, when it’s a long-term rental…