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Congressman says eliminating tax or exempting U.S. residents should be next
Congressman Brian Higgins welcomed an announcement by the government of Canada that it is postponing fines and interest associated with late-filed underused housing tax (UHT) returns through Oct. 31, 2023.
“This is a good development for the hundreds of residents from Western New York and across the United States who have been frustrated with the lack of notification and information, and frightened that processing delays – which are no fault of their own – could result in steep penalties,” said Higgins, who serves as co-chair of the Northern Border Caucus. “Still, this is only a small reprieve in what amounts to a wrongful tax on good neighbors. We are continuing the fight to see the underused housing tax eliminated entirely.”
Higgins’ team said, “The new 1% tax on ‘vacant or underused housing’ owned by non-resident, non-Canadians is putting a financial strain on Americans, many of whom have contributed to Canada’s economy and owned cottages in Canada for generations.
“Nearly 350 U.S. residents with property in Canada have completed an online survey objecting to the tax, and many more have called or written Congressman Higgins’ office. Of those who completed the survey, nearly 62% live in Western New York, but responses came from across the country including residents of Florida, Massachusetts, Ohio and Connecticut, to name a few. Nearly 30% of responders have owned their Canadian property for over 50 years, with close to 40% owning their Canadian home between 20-49 years.
“The tax forms are due in Canada by April 30, but owners must first file to receive a tax identifier number. In many cases, it takes weeks to receive the tax ID number, impacting the ability to file in a timely manner. Failure to pay the tax comes with a penalty ranging between $5,000 and $10,000, plus interest.”
Higgins has opposed the Underused Housing Tax since it was proposed in Canada’s budget for 2021. He continues to press the Biden administration to address the tax in bilateral discussions. Higgins said he believes the tax violates the United States-Mexico-Canada Agreement (USMCA), has asked the U.S. trade representative to open up consultations related to the trade violation, and followed up that request most recently during dialogue with Ambassador Tai in a Ways and Means Committee hearing on March 24.