In this episode of Get Real Wealthy Season 4, Quentin D'Souza discusses the Underutilized Housing Tax Form.
Quentine explains that property investors in Canada must complete the nine-page form, issued by the Canada Revenue Agency (CRA). Applicable to corporations, holdingc ompanies, and partnerships, it must be submitted annually by the end of April, starting in 2023. The form discloses property ownership under structures like corporations, limited partnerships, or joint ventures and is mandatory for properties with three or fewer units. Non-compliance fines are steep, at $10,000 per property. The form includes details about ownership, partnership, and vacancy, aiming to target vacant properties for additional taxation.
However, Quentin notes that the form may cause confusion for investors with non-traditional ownership structures or partnerships where not all owners are listed on the title. While the CRA may already possess some of this information from annual tax filings, the new form and database create a separate compilation of data that could potentially be shared with third parties like financial institutions. This could create problems for some investors in qualifying for properties or loans.
Although it is unclear whether the CRA can share this information, it is essential to be aware of potential risks and consider solutions like putting the property in your name or co-qualifying to alleviate any title issues. Quentin advises listeners to make sure to review the Underutilized Housing Tax Form if they have not completed it yet.
To reduce costs and bureaucracy when completing the required housing tax forms for multiple properties, Quentin suggests having an accountant complete the forms using one property as a template. Accountants may charge $500-$800 per form, but they can ensure that the nine-page forms are filed correctly.
In conclusion, Quentin emphasizes that as more bureaucratic procedures arise, fewer housing units might become available, especially for smaller-scale landlords managing three or fewer units.
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