Opinion
Escape Room 2 – The NEW Real Estate Owner Tax Game – High Stakes Edition
By Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr – CEO | Director of CGL Tax
Justin time for Tax Season, we have a new version of our most popular game, but this time you are now trying to convert your Real Estate to tax-Freeland.
No those are not typos.
In 2017, we released Escape Room – The NEW Small Business Tax Game – Family Edition after then Federal Liberal Finance Minister, Bill Morneau, finally released the new version of
the Tax on Split Income (“TOSI”) or the so-called “income sprinkling” rules.
This time, in this game, there are fewer unconditional exits, and the stakes are higher.
So just like I said in December 2017:
“These rules are written like a bad “escape room” game. The way these rules are written, everyone is caught… unless you can escape… and the exits are not clearly marked.”
The talking points in the media have been that the Underused Housing Tax (UHT) Act would only apply to non-resident and foreign owners.
However, what they failed to mention is that many Canadians will be caught by the filing requirement and will have to file or face penalties, even if they won’t owe any tax.
This ain’t your Daddy’s failure to file penalty.
Failing to file a UHT return faces a minimum penalty of $5,000 per individual, per property and $10,000 if you are a corporation.
This makes the failure to file a T1135 Foreign Property form look like pocket change.
So while you may not have to pay any UHT, you still might have to pay even more if you didn’t know you had to file it already this tax season because:
- the Underused Housing Tax Act is not part of the Income Tax Act;
- there are requirements to file even if you don’t owe;
- it is due on April 30 irrespective of your ordinary income tax filing deadline
- the filing is entirely separate from any other tax filing; and
- at the time of this article’s publication, it cannot be e-filed – it must be filled out and sent manually.
The prescribed Form UHT-2900 only came out on January 31, 2023, and applies to 2022.
As a result, you will need to figure out if you must file it by April 30 this year or face a minimum $5,000 penalty, per person, per property, for failure to file.
As this is new legislation with large penalty amounts, some practitioners are unaware if their errors and omissions insurance even includes coverage for these returns. This means you can expect to see extremely high fees for preparing these forms.
Can you think of a better way to navigate the messy rules than by playing a game for you to play this Tax Season?
Escape Room 2 – Rules of the Game
IMPORTANT RULES OF THE GAME: This is not an all-inclusive list. The below information is a high-level summary of the more common areas of concern. You should seek specialist advice on your specific circumstances and how the new rules will apply to you.
1) Were you the legal owner (a person/entity registered on title), jointly or otherwise, of a residential property in Canada as of December 31?
If yes, you are still trapped and get to keep playing.
If not, Congrats! You escaped! You can go back to paying rent or sleeping in your vehicle without having to worry about the UHT.
2) Are you a publicly-traded Trust or Corporation that is incorporated under the laws of Canada or a province and listed on a Canadian Stock Exchange?
If yes, Congrats! You escaped! You may continue working on your Securities filings for your upcoming AGM.
If not, you’re still trapped – keep playing.
3) Are you a Registered Charity, Cooperative Housing Corporation, Municipality, Indigenous Governing Body, Government of Canada, Provincial Government, University, Public College, School Authority or Hospital Authority?
If yes, Congrats! You escaped! You may continue dealing with your annual audit of financial statements.
If not, you’re still trapped – keep playing.
4) Are you an individually wealthy person that does not like to share with others?
For example, you own one or more multiple residential properties – but every single one of them is only in your personal name. No spouse, no corporation, no trust, no partnerships, no friends, no one!
If yes, Congrats! You escaped! You may go back to swimming alone in your pool of wealth.
If not, you’re still trapped – keep playing.
5) Is the only reason you are on the land title because you are currently the executor or administrator of someone’s estate?
If yes, Congrats! You escaped! You may continue to grieve and fill out the mountains of government paperwork while everyone else asks you “where’s my inheritance?”
If not, you’re still trapped – keep playing.
6) Are you an individual Canadian Citizen or Permanent Resident of Canada (under the Immigration and Refugee Protection Act) that does not have a business, farm, or rental property owned with another person that could possibly be viewed as a partnership?
If yes, Congrats! You escaped! You may continue to live in your home, paycheque to paycheque, while your cost of payroll deductions and mortgage interest continue to rise and eat away at it.
If not, you’re still trapped – keep playing.
7) Does your business, farm, or rental property co-owned with another person have a residential dwelling on it?
For example, is your home on the same land title as your farmland or business?
If yes, Congrats! … haha – fooled you! You’re still trapped, and now you get to play the UHT Escape Room Game – Advanced Edition
If not, Congrats! You just made it out – lucky number 7!
Welcome to UHT Escape Room Game – Advanced Edition
In this Edition, everyone must file or face a minimum $5,000 penalty per person on each property.
For example, husband/wife partnership with three residential properties = 2 x 3 x $5,000 = $30,000 penalty if you don’t file!
8) Are you a Specified Canadian Corporation where at least 90% of the ownership and control (direct and indirect) are held by other Specified Canadian Corporations, Canadian Citizens, or Permanent Residents of Canada?
If yes, you have to file but you won’t have to pay. Don’t forget to file by April 30 no matter what your fiscal year-end date is!
If not, you’re still trapped – keep playing.
9) Are you a Specified Canadian Partnership where every member of the partnership is either a Specified Canadian Corporation, or would not have to file if we ignored the whole “partner of a partnership” thing?
If yes, Congrats! You have to file but won’t have to pay.
If not, You’re still trapped – keep playing.
10) Are you a Specified Canadian Trust where every beneficiary of the trust is either a Specified Canadian Corporation, or would have escaped from filing if they were the owner themselves?
If yes, Congrats! You have to file but won’t have to pay.
If not, You’re still trapped – keep playing.
11) In this filing year or last year, were you an owner of a property when another co-owner that owned 25% or more died?
If yes, Congrats! It’s sure a good thing they died! You have to file but won’t have to pay
If not, you’re still trapped – keep playing.
12) Did you die this year or last year (or are you the executor for someone that did and you were not on the land title before they died)?
If yes, then UHT definitely puts the FUN in FUNeral! You have to file, but won’t have to pay – don’t forget to play again next year!
If not, you’re still trapped (but alive) – keep playing.
13) Did you buy the property this year and never owned or had your name on it before in the past decade?
If yes, Congrats on becoming a home-owner, on your first… or second… or third… or… well it doesn’t matter how many homes you have, just as long as you bought it this year. You have to file but don’t have to pay – play again next year!
If not, you’re still trapped – keep playing.
14) Was the property still under construction before April Fools’ Day of the filing year?
If yes, Congrats – this isn’t an April Fools’ prank. You have to file, but don’t have to pay!
If not, You’re still trapped – keep playing.
15) Was the property finished before April Fools’ Day of the filing year, offered up for sale to the public, but never sold or occupied by an individual as a place of residence or lodging during the year?
If yes, Congrats! Isn’t it fun making mortgage payments on a home no one wants? You have to file but don’t have to pay.
If not, you’re still trapped – keep playing.
16) Was the property unable to be lived in for at least 120 consecutive days because of renovations undertaken that occurred in a timely fashion?
If yes, Congrats! As long as you haven’t used this escape door in the last decade, you can now use it. You have to file but don’t have to pay – otherwise, it’s still locked and you keep playing.
If not, you’re still trapped – keep playing.
17) Was the property unable to be lived in for at least 60 consecutive days in the year because of disaster or hazardous conditions caused by circumstances outside the reasonable control of an owner?
If yes, Congrats! As long as you haven’t used this escape door more than once before for the same disaster or hazardous condition on the property you have to file, but not pay – otherwise, you’re still trapped.
If not, you’re still trapped – keep playing.
18) Is the property unable to be accessed year-round because there is no maintained public access during the off-season?
If yes, Congrats! You have to file but don’t have to pay.
If not, you’re still trapped – keep playing.
19) Is the property unsuitable for year-round use as a place of residence?
If yes, Congrats! Keep following that boiled water advisory and burning everything around you to stay warm. The government is providing you with more blessings: you have to file but don’t have to pay.
If not, you’re still trapped – keep playing.
20) Is the property being used for at least a month consecutively and more than 180 days in the year by you, your spouse or common-law partner, child, or parent who is a Canadian citizen or permanent resident?
If yes, Congrats! You have to file but don’t have to pay – wasn’t this fun? – Be sure to play again next year!
If not, you’re still trapped – keep playing.
21) Is the property the primary residence for you, your spouse or common-law partner, or for your child attending a designated learning institution?
If yes, Congrats! You might have to file an election and your spouse must agree. If you need to convince them, tell them that marriage counselling will be cheaper than the failure to file penalty. That should get them to agree to anything. You have to file but don’t have to pay.
If not, you’re still trapped – keep playing.
22) Is the property a vacation property that is used by you or your spouse or common-law partner for at least 28 days in the year and is located in an “eligible area of Canada” (basically rural enough area where they might get dirty trying to find you)
If yes, Congrats on being able to take 4-weeks of vacation every year – you have to file, but won’t have to pay.
If not, you’re still trapped – and likely still at work – keep playing.
23) Speaking of work – is the property being used by you or your spouse or common-law partner for at least a month consecutively and more than 180 days in the year just while you are working in Canada, and the property relates to that purpose?
If yes, Congrats! You have to file but won’t have to pay.
If not, you’re still trapped – have you considered renting it out?
24) Is the property being rented under a written agreement for at least a month consecutively and more than 180 days in the year to someone paying at least 5% of the property value per year as rent?
If yes, Congrats! You have to file but won’t have to pay.
If not, you’re still trapped – keep playing – and raise that rent! We wouldn’t want anyone to have affordable housing.
25) Is the property being rented under a written agreement for at least a month consecutively and more than 180 days in the year to an unrelated person?
If yes, Congrats! But why are you charging them less than fair-value rent? What kind of slum lord are you? Stop making things affordable! You have to file but won’t have to pay.
If not, you are still trapped and now move on to the UHT Escape Room Game – High Stakes Edition
Welcome to UHT Escape Room Game – High Stakes Edition
In this edition of the UHT Escape Room Game, everyone must ante up and Pay to Play!
26) Is the Fair Market Value of the property lower than both the Property Tax Assessed Value and the most recent purchase price of the property?
If yes, you must have a formal appraisal done effective as of a date in the filing year or before the filing deadline. Then you only have to pay 1% of this value multiplied by your percentage of ownership as your UHT.
If not, either get that appraisal done or be happy that your property has increased in value. In the meantime keep playing.
27) Is the Property Tax Assessed Value more than the most recent purchase price?
If yes, Congrats! Not only has your property tax gone up, but so has your UHT – you owe 1% of this value multiplied by your percentage of ownership.
If no, Congrats on your property being worth less than you paid for it – keep playing.
28) Congrats on making it to the end. If you’ve come this far, it means:
- You own property in Canada;
- You are not a Canadian Citizen or Permanent Resident;
- You are alive, or you’ve been dead for more than two years;
- You don’t rent out the property under a written agreement …or if you do, it is to a relative, and it is way too affordable;
- If it is a vacation property, you don’t use it for 4-weeks of vacation likely because you don’t get 4-weeks of vacation;
- You don’t use the property for more than 30 days consecutively, nor more than 180 days in the year for a work-related purpose;
- You didn’t bother getting a formal appraisal done;
- You paid more than the current Property Tax Assessed value for the property; and
- You wonder why they didn’t just say all this in the first place
Congrats – you get to pay 1% of the purchase price when you last acquired the property multiplied by your percentage of ownership.
Do you feel like you won?
Now… as for next year…
… I want to play a game…
From Trish Wood is Critical
Peaceful convoy — violent voters. They convicted the wrong people.
TAMARA LICH, CHRIS BARBER AND THE OTHER TRUCKERS INSPIRED THIS: POLICE AND PROTESTORS HUGGING AND SINGING OH CANADA. THE TRUDEAU GOVERNMENT WAS ALREADY SMEARING THEM AS DANGEROUS.
In April of 2025, one day after the conviction of Lich and Barber for leading a protest with no violence, our politicians and media finally got what they wanted — division, and citizens absolutely hating each other. Watch these videos if you can, over and over again until it sinks in. View the one above and then the one below and decide who is harming the country.
Two middle-aged women had an “elbows up” fisticuffs yesterday near the waiting-to see-Mark-Carney line before an event. As you might figure, I was not surprised and knew violence was coming — not from a terror group and not from truckers. They pit us against each other with the full collaboration of paid-for media. We are broken, brainwashed and angry. We do not understand why our friends, neighbours and family vehemently support ideas that we know will harm the country.
They think we are monsters. And so it goes. Watch and compare to the scene above. And think about who was convicted this week.
Click image to see video
Our ideas can’t be discussed civilly and we must remain in our silos so as not to pose a threat to the elites — the way the Freedom Convoy did. This was Tamara and Chris’ mistake. They brought people together.
Liberals, and I would hazard all contemporary pols are not working to actually make our lives better. They seem to have their own agenda — even Trump whom I had some hope for.
Our lives get worse. They enrich themselves spending money overseas for wars we the people don’t want. And it seems they all walk away from “public service” with mucho brass in pocket.
The video of the fighting women shows the bread and circuses is now us. This ancient Roman idiom is defined as:
Bread and circuses” refers to pacifying people with food and entertainment to prevent them from taking action on civic duties.
During COVID-19, until January of 2022, they thought they had this modus operandi all locked-down. Canadians were compliant and some were even enjoying their marathons of garbage Netflix shows and soggy Door Dash deliveries. We were staying home, staying safe, getting fat and dependant on the government. Except the men and women who worked hard to keep the country running — like truckers. And those of us with a fully operative bullshit detector — you know, actual journalists.
There were many suicides, overdoses and other tragedies. Some of us allowed a sick parent to die alone. Our spiritual health declined and we closed off the part of our brain that safeguards our need for fellowship.
And then the Convoy happened and pulled back the curtain to reveal The Great and Mighty Oz manipulating the whole damn thing.
Yes, the Convoy’s presence in Ottawa was dangerous to the elites but not for the reasons they say. Of course it was disruptive for the citizens. Isn’t that what protests are supposed to be? But many forget that they were indirectly saving lives. I know it because people have told me.
The reason the Convoy had to be dramatically taken down and then punished for three years is because they reminded us – that we could push back and we were not alone. But when tyranny comes, united opposition must be crushed.
In the courtroom on Thursday, Justice Perkins-McVey went out of her way to speak highly of Tamara’s non-stop admonitions to the convoy that they stay peaceful, cooperate with police and put love at the top of their agenda. It was in almost every communication Tamara made to a big, burly group of mostly men who listened and then, even during the police violence were nearly Gandhi-like in their resistance. You can see it in the videos.
John Lennon would have been proud and in fact Imagine was played for the protestors who at one point sang along. But according to Judge Perkins-McVey, Lich’s commitment to keeping the peace will work only as mitigation during sentencing in a couple of weeks. She was found guilty of mischief in a definition so broad it includes everyone no matter what they actually did. I still can’t believe it.
The other revelation, I’m being sarcastic here, is that Chris Barber swears when he is talking to other truckers. I was uneasy that Perkins-McVey read out word-for-word an expletive-filled rant by an exhausted and frustrated Barber in which she herself repeated his words in the courtroom, F-bomb for F-bomb, making him sound like a crude, aggressive person. Which he is not. I could see he was embarrassed as his words were never meant for consumption in a setting like that.
It wasn’t necessary and to me, it felt like a swerve to appease the Crown. I have never heard Chris speak that way in front of civilians, even myself and I have been known to F-bomb in front of him on occasion – a kind of tacit permission that he has never accepted. In the heart of Ottawa, a city beset by gentility, it became clear in Courtroom Five that the subtext might be interpreted as — the crudeness of these working class protestors was an assault on the city’s good name and manners.
For all they did in Ottawa and for the country, Barber was reduced in that courtroom to an angry man who couldn’t control his potty-mouth. Talk about prejudicial. Maybe she was giving the defence a gift for the appeal. I hated it on a visceral level. This was not the kindly, thoughtful judge I had been observing through the course of the trial. How could she not know the affect she was having? Perhaps she did.
Ready for more?
By Franco Terrazzano
Prime Minister Mark Carney wrote a 500-page book praising carbon taxes.
Well, I just wrote a book smashing through the government’s carbon tax propaganda.
It tells the inside story of the fight against the carbon tax. And it’s THE book the carbon taxers don’t want you to read.
My book is called Axing the Tax: The Rise and Fall of Canada’s Carbon Tax.
Axing the Tax: The Rise and Fall of Canada’s Carbon Tax
Every now and then, the underdog wins one.
And it looks like that’s happening in the fight against the carbon tax.
It’s not over yet, but support for the carbon tax is crumbling. Some politicians vow to scrap it. Others hide behind vague plans to repackage it. But virtually everyone recognizes support for the current carbon tax has collapsed.
It wasn’t always this way.
For about a decade now, powerful politicians, government bureaucrats, academics, media elites and even big business have been pushing carbon taxes on the people.
But most of the time, politicians never asked the people if they supported carbon taxes. In other words, carbon taxes, and the resulting higher gas prices and heating bills, were forced on us.
We were told it was good for us. We were told carbon taxes were inevitable. We were told politicians couldn’t win elections without carbon taxes, even though the politicians that imposed them didn’t openly run on them. We were told that we needed to pay carbon taxes if we wanted to leave a healthy environment for our kids and grandkids. We were told we needed to pay carbon taxes if we wanted to be respected in the international community.
In this decade-long fight, it would have been understandable if the people had given up and given in to these claims. It would have been easier to accept what the elites wanted and just pay the damn bill. But against all odds, ordinary Canadians didn’t give up.
Canadians knew you could care about the environment and oppose carbon taxes. Canadians saw what they were paying at the gas station and on their heating bills, and they knew they were worse off, regardless of how many politicians, bureaucrats, journalists and academics tried to convince them otherwise. Canadians didn’t need advanced degrees in economics, climate science or politics to understand they were being sold a false bill of goods.
Making it more expensive for a mom in Port Hope to get to work, or grandparents in Toronto to pay their heating bill, or a student in Coquitlam to afford food won’t reduce emissions in China, Russia, India or the United States. It just leaves these Canadians, and many like them, with less money to afford everything else.
Ordinary Canadians understood carbon taxes amount to little more than a way for governments to take more money from us and dictate how we should live our lives. Ordinary Canadians also saw through the unfairness of the carbon tax.
Many of the elites pushing the carbon tax—the media, politicians, taxpayer-funded professors, laptop activists and corporate lobbyists—were well off and wouldn’t feel the brunt of carbon taxes. After all, living in a downtown condo and clamouring for higher carbon taxes doesn’t require much gas, diesel or propane.
But running a business, working in a shop, getting kids to soccer and growing food on the farm does. These are the Canadians the political class forgot about when pushing carbon taxes. These are the Canadians who never gave up. These are the Canadians who took time out of their busy lives to sign petitions, organize and attend rallies, share posts on social media, email politicians and hand out bumper stickers.
Because of these Canadians, the carbon tax could soon be swept onto the ash heap of history. I wrote this book for two reasons.
The first is because these ordinary Canadians deserve it. They worked really hard for a really long time against the odds. When all the power brokers in government told them, “Do what we say—or pay,” they didn’t give up. They deserve to know the time and effort they spent fighting the carbon tax mattered. They deserve all the credit.
Thank you for everything you did.
The second reason I wrote this book is so people know the real story of the carbon tax. The carbon tax was bad from the start and we fought it from the start. By reading this book, you will get the real story about the carbon tax, a story you won’t find anywhere else.
This book is important because if the federal Liberals’ carbon tax is killed, the carbon taxers will try to lay blame for their defeat on Prime Minister Justin Trudeau. They will try to say that carbon taxes are a good idea, but Trudeau bungled the policy or wasn’t a good enough salesman. They will try to revive the carbon tax and once again make you pay more for gas, groceries, and home heating.
Just like with any failed five-year plan, there is a lingering whiff among the laptop class and the taxpayer-funded desk rulers that this was all a communication problem, that the ideal carbon tax hasn’t been tried yet. I can smell it outside my office building in Ottawa, where I write these words. We can’t let those embers smoulder and start a fire again.
This book shows why the carbon tax is and always will be bad policy for ordinary Canadians.
Franco’s note: You can pre-order a copy of my new book, Axing the Tax: The Rise and Fall of Canada’s Carbon Tax, here: https://www.amazon.ca/Axing-
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