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…
2025 Federal Election
The Cost of Underselling Canadian Oil and Gas to the USA

From the Frontier Centre for Public Policy
Canadians can now track in real time how much revenue the country is forfeiting to the United States by selling its oil at discounted prices, thanks to a new online tracker from the Frontier Centre for Public Policy. The tracker shows the billions in revenue lost due to limited access to distribution for Canadian oil.
At a time of economic troubles and commercial tensions with the United States, selling our oil at a discount to U.S. middlemen who then sell it in the open markets at full price will rob Canada of nearly $19 billion this year, said Marco Navarro-Genie, the VP of Research at the Frontier Centre for Public Policy.
Navarro-Genie led the team that designed the counter.
The gap between world market prices and what Canada receives is due to the lack of Canadian infrastructure.
According to a recent analysis by Ian Madsen, senior policy analyst at the Frontier Centre, the lack of international export options forces Canadian producers to accept prices far below the world average. Each day this continues, the country loses hundreds of millions in potential revenue. This is a problem with a straightforward remedy, said David Leis, the Centre’s President. More pipelines need to be approved and built.
While the Trans Mountain Expansion (TMX) pipeline has helped, more is needed. It commenced commercial operations on May 1, 2024, nearly tripling Canada’s oil export capacity westward from 300,000 to 890,000 barrels daily. This expansion gives Canadian oil producers access to broader global markets, including Asia and the U.S. West Coast, potentially reducing the price discount on Canadian crude.
This is more than an oil story. While our oil price differential has long been recognized, there’s growing urgency around our natural gas exports. The global demand for cleaner energy, including Canadian natural gas, is climbing. Canada exports an average of 12.3 million GJ of gas daily. Yet, we can still not get the full value due to infrastructure bottlenecks, with losses of over $7.3 billion (2024). A dedicated counter reflecting these mounting gas losses underscores how critical this issue is.
“The losses are not theoretical numbers,” said Madsen. “This is real money, and Canadians can now see it slipping away, second by second.”
The Frontier Centre urges policymakers and industry leaders to recognize the economic urgency and ensure that infrastructure projects like TMX are fully supported and efficiently utilized to maximize Canada’s oil export potential. The webpage hosting the counter offers several examples of what the lost revenue could buy for Canadians. A similar counter for gas revenue lost through similarly discounted gas exports will be added in the coming days.
What Could Canada Do With $25.6 Billion a Year?
Without greater pipeline capacity, Canada loses an estimated (2025) $25.6 billion by selling our oil and gas to the U.S. at a steep discount. That money could be used in our communities — funding national defence, hiring nurses, supporting seniors, building schools, and improving infrastructure. Here’s what we’re giving up by underselling these natural resources.

342,000 Nurses
The average annual salary for a registered nurse in Canada is about $74,958. These funds could address staffing shortages and improve patient care nationwide.
Source

39,000 New Housing Units
At an estimated $472,000 per unit (excluding land costs, based on Toronto averages), $25.6 billion could fund nearly 94,000 affordable housing units.
Source
About the Frontier Centre for Public Policy
The Frontier Centre for Public Policy is an independent Canadian think-tank that researches and analyzes public policy issues, including energy, economics and governance.
Automotive
Hyundai moves SUV production to U.S.

MxM News
Quick Hit:
Hyundai is responding swiftly to 47th President Donald Trump’s newly implemented auto tariffs by shifting key vehicle production from Mexico to the U.S. The automaker, heavily reliant on the American market, has formed a specialized task force and committed billions to American manufacturing, highlighting how Trump’s America First economic policies are already impacting global business decisions.
Key Details:
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Hyundai has created a tariffs task force and is relocating Tucson SUV production from Mexico to Alabama.
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Despite a 25% tariff on car imports that began April 3, Hyundai reported a 2% gain in Q1 operating profit and maintained earnings guidance.
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Hyundai and Kia derive one-third of their global sales from the U.S., where two-thirds of their vehicles are imported.
Diving Deeper:
In a direct response to President Trump’s decisive new tariffs on imported automobiles, Hyundai announced Thursday it has mobilized a specialized task force to mitigate the financial impact of the new trade policy and confirmed production shifts of one of its top-selling models to the United States. The move underscores the gravity of the new 25% import tax and the economic leverage wielded by a White House that is now unambiguously prioritizing American industry.
Starting with its popular Tucson SUV, Hyundai is transitioning some manufacturing from Mexico to its Alabama facility. Additional consideration is being given to relocating production away from Seoul for other U.S.-bound vehicles, signaling that the company is bracing for the long-term implications of Trump’s tariffs.
This move comes as the 25% import tax on vehicles went into effect April 3, with a matching tariff on auto parts scheduled to hit May 3. Hyundai, which generates a full third of its global revenue from American consumers, knows it can’t afford to delay action. Notably, U.S. retail sales for Hyundai jumped 11% last quarter, as car buyers rushed to purchase vehicles before prices inevitably climb due to the tariff.
Despite the trade policy, Hyundai reported a 2% uptick in first-quarter operating profit and reaffirmed its earnings projections, indicating confidence in its ability to adapt. Yet the company isn’t taking chances. Ahead of the tariffs, Hyundai stockpiled over three months of inventory in U.S. markets, hoping to blunt the initial shock of the increased import costs.
In a significant show of good faith and commitment to U.S. manufacturing, Hyundai last month pledged a massive $21 billion investment into its new Georgia plant. That announcement was made during a visit to the White House, just days before President Trump unveiled the auto tariff policy — a strategic alignment with a pro-growth, pro-America agenda.
Still, the challenges are substantial. The global auto industry depends on complex, multi-country supply chains, and analysts warn that tariffs will force production costs higher. Hyundai is holding the line on pricing for now, promising to keep current model prices stable through June 2. After that, however, price adjustments are on the table, potentially passing the burden to consumers.
South Korea, which remains one of the largest exporters of automobiles to the U.S., is not standing idle. A South Korean delegation is scheduled to meet with U.S. trade officials in Washington Thursday, marking the start of negotiations that could redefine the two nations’ trade dynamics.
President Trump’s actions represent a sharp pivot from the era of global corporatism that defined trade under the Obama-Biden administration. Hyundai’s swift response proves that when the U.S. government puts its market power to work, foreign companies will move mountains — or at least entire assembly lines — to stay in the game.
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