Following Higgins' urging, Canada announces extension of deadline for Underused Housing Tax

Filers have 6 additional months to file without penalty, as cost-benefit analysis is completed

Congressman Brian Higgins welcomed the news that the government of Canada is giving owners affected by the Underused Housing Tax until April 30, 2024, to file 2022 taxes without penalties. The announcement of the extension comes days after Higgins, who serves as co-chair of the Northern Border Caucus, called for a suspension of tax collection until the findings of a cost-benefit analysis and a House of Commons report are released.

In a letter to Canadian Ambassador Hillman, Higgins wrote, “The deadline of October 31, 2023 to file a tax return and pay the amount owed without penalty is rapidly approaching, yet the cost-benefit analysis requested by 34 Members of Parliament from the Parliamentary Budget Officer has not been published, nor has the report from the House of Commons Standing Committee on International Trade. I request that the Government of Canada suspend the Underused Housing Tax until those reports are completed and their findings addressed.”

Higgins’ team said, “The Underused Housing Tax is a new 1% tax on “vacant or underused housing” owned by non-resident, non-Canadians. Tax forms in Canada were originally due by April 30, 2023. However, due to the confusion and challenges around the new tax, the government of Canada announced earlier this year that it would not charge penalties or interest on tax payments made before Nov. 1, 2023, which effectively extended the deadline to Oct. 31. This new announcement gives taxpayers an additional six months.”

Higgins has repeatedly expressed his opposition to the Underused Housing Tax, through remarks on the floor of the House of Representatives, in letters urging the Biden administration to address the issue with Canada, during meetings with Canadian leaders, and by leading a bipartisan push with other members of Congress urging Canada to hold U.S. residents harmless.

His team said, “That effort led to Parliament taking a closer look at the impact of the tax and agreeing to conduct a cost-benefit analysis. On June 5, 2023, Congressman Higgins was among the witnesses providing testimony on the Underused Housing Tax before the House of Commons Standing Committee on International Trade. (video)”

The Standing Committee on International Trade met again Oct. 24 to consider a draft report on the impacts of the Underused Housing Tax on Canadian border communities, and voted to collect dissenting or supplementary opinions through Tuesday, Nov. 7.

In his letter to Hillman, Higgins wrote, “The unintended consequences of the Underused Housing Tax have harmed the economy and culture of border communities. Americans who own modest generational properties near the border are unfairly caught in its net, jeopardizing the health of these longstanding binational neighborhoods. My office continues to receive outreach daily expressing concerns about Underused Housing Tax and the financial burden it will place on hardworking Americans who cherish their cottages in Canada.”