Canada's Underused Housing Tax "unfairly impacting" Americans: US Congress members

May 29 2023, 5:11 pm

Members of the US Congress have written a strongly worded letter to their secretary of state, Antony Blinken, about how Canada’s newly introduced Underused Housing Tax (UHT) is affecting their constituents.

According to the Government of Canada, the UHT is an annual 1% tax on the ownership of vacant or underused housing in Canada. It took effect on January 1, 2022, and was proposed as part of the federal bud in 2021.

“The tax usually applies to non-resident, non-Canadian owners,” the government says, adding that it also applies to Canadian owners in some cases.

The CRA delayed the April 30 tax deadline for the UHT to “provide more time for affected owners to take necessary actions to comply.” As a result, no penalties will apply if affected owners file for UHT returns and payments before November 1.

With the new deadline fast approaching, 11 US Congress members wrote a letter to Secretary Blinken on Sunday.

“We write to you today to voice frustration and concern on behalf of our constituents impacted by the Government of Canada’s recently implemented Underused Housing Tax,” the letter begins.

“This 1% tax on vacant or underutilized properties owned by ‘non-resident, non-Canadians,’ is unfairly impacting Americans who own property in Canada and putting the strong bond between our countries in jeopardy.”

They also requested that Blinken works with Government of Canada counterparts to find a “solution to exempt Americans from this tax.”

The Members of the US Congress detailed that as of Sunday, May 25, 403 Americans who own property in Canada have responded to a survey about the hardship the Underused Housing Tax would cause.

“Their stories show that Americans have owned these properties for generations, creating strong communities abroad and significantly contributing to the Canadian economy. They should be considered an exception to this policy,” the letter reads.

The 11 members of the US Congress who signed it say that they understand the UHT was meant to combat outside real estate speculation and help promote affordable housing in Canada, but believe Americans have been “unfairly caught in its net.”

They complained that even though the Government of Canada has provided exemptions, many properties do not qualify due to their location and that the Canada Revenue Agency (CRA) has been “unclear” about the methods to submit documentation as proof to attain exemption.

The letter stresses the urgency of finding a solution before the October 1 deadline.

“We urge you to address this important matter with the Government of Canada to preserve these historic communities, maintain the binational economy that they support, and advocate for our constituents,” it concludes.

Imaan SheikhImaan Sheikh

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