Underused Housing Tax Act

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 is, on December 31 of a calendar year, an owner (other than an excluded owner) of a residential property must pay to Her 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) the person is an owner of the residential property solely in their capacity as

    • (i) a partner of a partnership that is a specified Canadian partnership in respect of the calendar year, or

    • (ii) a trustee of a trust that is a specified Canadian trust in respect of the calendar year and the residential property;

  • (b) the person is in respect of the calendar year a specified Canadian corporation;

  • (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 and the child occupies the residential property for the purposes 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.