Underused Housing Tax (UHT)…Good News and Bad News

For non-residents, there is good news and bad news about UHT. It all depends on how often you want to use your Whistler property, and who is on the title deed. In other words, what is the intent of your use. One would hope that you love coming to Whistler to enjoy this wonderful resort year-round. This page offers an overview and focuses on non-resident owners as the UHT Act affects them.

Note: the author of this page is a realtor, not an accountant. Researching this topic and meeting with a local tax accountant was like going down a rabbit hole. In addition, understanding UHT and recreational property in Whistler is scratching the surface of understanding UHT. Therefore, only the basics have been noted on this page. It is essential to talk with your Whistler accountant when you first start your search. Let me know if you need one who specializes in non-residents.

Overview

It appears that the Underused Housing Tax (UHT) Act is the Government of Canada’s (GOC) way to find out who owns property in Canada and to determine how much each property is being used. There are several types of zoning for properties in Whistler, various exemptions and the GOC wants to know what is going on with all types of ownership. Therefore, each non-resident owner must file an annual UHT return. Some might say that this is just a cash-grab by the current liberal government. Either way, failure to comply will result in fines…another cash-grab.

A Non-Resident is an Affected Owner

From the Government of Canada website:

• As an affected owner (non-resident), you must file an annual UHT return by April 30th. This document tells the GOC how much you have used your property.
• Usage is based on the previous calendar year.
• Each affected owner of the property must file their own UHT return.
• If an affected owner has used the property a minimum of 28 days then he files the UHT return, and does not pay any UHT.
• If an affected owner of the property has not used the property a minimum of 28 days, he files the UHT return and “writes a cheque” for his percentage of ownership x 1% of the market value of your property.

Good News and Bad News

Good News: Whistler is exempt from the Government of Canada’s (GOC) ban on foreign investment in Canadian real estate. Non-residents are welcome to invest in Whistler.

Good News: The total for a property is 1% UHT. Each affected owner pays their percentage of ownership if they do not use the property for 28 days. If there is one affected owner, he is responsible for 100% of the 1% UHT. If there are 4 affected owners each is responsible for 25% of the 1% UHT.

Good news: Each person who wants to buy a (Phase 1) property zoned for nightly rental and rent out nightly and use it themselves can now do so. The owner(s) can use their property for 28 days each without repercussions from the Canada Revenue Agency (CRA) while generating revenue. UHT has overridden the GST requirements. This is great news.

Good news: Canadian Citizens who reside outside of Canada for UHT purposes are treated as exempt from UHT. This is different from GST restrictions where a Canadian Citizen who resides outside of Canada is treated as a non-resident.

Good news: Affected owners who own vacant land are exempt from UHT.

Good news: Affected owners who are building a home are exempt from UHT. The property must be habitable before UHT comes into play.

Good and Bad News: For some owners this is bad news, for others, it has no bearing because their quarter share is blocked for owner usage and is not in the rental pool. Affected owners are required to use the property for 28 days. Therefore, these affected owners have to use the property 1/3 of the time the property is available to them. Note: Quarter-share properties are not featured on this site.

Good and Bad News: Affected owners of Phase 2 investment property are required to use the property for a minimum of 28 days to offset the UHT. However, the good news, is that with a Phase 2 property, the non-resident is allowed to use the property up to 56 days without penalty. The bad news because Phase 2 is a business income investment typically purchased because of cash flow the owner may not want to use the property 28 days, as it will affect cash flow. Read the page on Non-Resident: Investment Property for more on Phase 2. Note: Phase 2 properties are not featured on this site.

Examples of Usage

Names On the Title Deed

The UHT Act states that an affected owner is a non-resident owner and must use the property a minimum of 28 days to avoid paying UHT. To clarify, each owner on title has to use the property 28 days each in the calendar year. However, if the person on title is married or in a common-law relationship then that owner has some help whether their partner is on title or not.

Each owner on title has to file for UHT Return by April 30th each year. If there are four joint owners of a property, each is responsible for filing a UHT return by April 30th and paying 1% each if they do not use the property up to 28 days. It is an “every man for himself” situation. See the example below:

Names On Title Deed Chart

Names on the Title Deed	Sharing the Usage	UHT 28 days
John Smith	John is on the title deed. His wife Judy is not on the title deed. John and Judy are either married or common-law.	Although it is John’s responsibility to use the property 28 days, he can include Judy’s use of the property. If John and Judy come to Whistler for 7 days, either together or separately, that is 14 days towards John’s UHT. If Judy comes by herself for another 7 days that is now 21 days of John’s UHT covered.
Tony Jones	Tony is on title and is neither married nor has a common law partner.	Tony has to use the property 28 days for him to avoid UHT.
Terry Baxter and Susan Baxter	Terry and Susan are both on the title deed. Terry and Susan are married or common-law.	Between Terry and Susan they have to use the property 28 days between them to avoid UHT. If Terry and Susan come together to Whistler for 7 days that is 14 days towards Terry’s UHT and 14 days towards Susan’s UHT.

Financial Penalty Chart

Names on the Title Deed	Percentage ownership	Usage in previous year	Value of the Condo is $1,000,000.
John Smith	25%	28 days	No UHT
Tony Jones	25%	27 days	(1% x $1M) =$10,000 25% x $10,000 =$2,500.00
Terry Baxter and Susan Baxter	50%	30 days	No UHT

Joint Owners Usage

• 2 people who are neither married nor in a common law relationship with each other: both are non-residents and they are joint tenants, each owning a 50% share of the condo in Whistler.
• Each of them must file their own UHT return by April 30th based on usage of the previous calendar year.
• Each is responsible for using the property for 28 days to be exempt from UHT.
• Person A uses the property for 28 days.
• Person B uses it less than 28 days.
• Person B has to pay half of the 1% UHT tax. Person B pays half because he owns 50% of the condo.

Rental Property…The Good News

Before UHT was introduced those buyers who wanted to own a phase 1 nightly rental property and use it themselves were under the restriction of usage according to GST regulations. When the buyers deferred the GST they were in essence, signing an agreement with the Canada Revenue Agency (CRA) that the property would be used for rental purposes only. There was no mention of how much the owner could use it themselves and owners would use their property knowing that the CRA could come knocking at any time. For more details, read the blog on GST Buyer Information.

Since the introduction of UHT that is no longer a consideration. Therefore the good news is that you can now use your rental property for 28 days each year without repercussions from the CRA. However, how much more than 28 days is where the question now comes in. The sweet spot seems to be between 28 days and 35 days…but this is a question to ask your accountant. If you are planning to use the property more than 35 days, it may be advisable to keep the property as residential, or pay the GST to change the use of the property to residential.

Phase 2 Property…The Bad News

Although not featured on this site, the owners of Phase 2 properties typically buy these properties as a business income investment property. A place to park money in Canada. For these buyers reaching 28 days of usage may never have been in their investment plan. For more information please click through to the page, Investment for a full explanation on Phase 2 investment properties.

Each owner on title has to file a UHT return like everyone else and note that the owner did not use the property for 28 days. When your accountant submits the return with the payment, the accountant may check the box that says “The residential property is not suitable for year-round use as a place of residence”. I would not expect any changes to be made by the CRA on this situation in favour of phase 2 properties. It basically comes down to if you own in Whistler you use your property for 28 days or you pay the 1%.

Quarter Share…The Good News

What happens if you own a quarter-share, does that mean you have to use each 1/4 share for 28 days to avoid the UHT penalty? No, it does not mean that. The usage requirement for one 1/4 share is a minimum of 28 days. The same rules apply to quarter shares as to full ownership. For example, a non-resident owns 104A in Legends then the UHT requirement is 28 days. If the same non-resident owns 104A Legends and 104B Legends then the UHT requirement is 28 days total. In other words, it is not 56 days (2 x 28 days).

Should the non-resident owner of 104A be unable to use the property for 28 days then the UHT penalty payment would be 25% of 1% of the value of the property.

If the non-resident owner owns 104A and 104B the UHT penalty would be 50% of the 1% of the value of the property.

Zoning and UHT

Zoning on a Whistler property was determined decades ago and is documented in the Official Community Plan. The zoning established rarely changes. The zoning indicates how a property can and in some cases, must be used. Each property type has zoning options. The best zoning for your purchase is based on your intent of use and budget.

Type of property	Zoning Activated	Each Owner Usage to avoid UHT
House, townhouse, condo	Residential	Use it for 28 days or pay the percentage of ownership x 1% market value = UHT due
House, townhouse, condo	Phase 1 nightly rental	Use it for 28 days or pay the percentage of ownership x 1% market value = UHT due
Condo hotel	Phase 2	Use it for 28 days or pay the percentage of ownership x 1% market value = UHT due
Quarter share	Phase 1	Use it for 28 days or pay 25% x 1% market value = UHT due (based on owning one quarter share)
Vacant Land	Any type	No UHT
Building a house	Any type	No UHT until it is habitable.

Selling Property and UHT

Since UHT is based on usage in the calendar year, that means it is not pro-rated. Therefore, if you sell your property, as a non-resident you will not pay any UHT that year.

Whistler is Unique

Whistler is one of the few places in Canada that has residential properties with zoning for nightly rentals. Sun Peaks in British Columbia and Mont Tremblant in Quebec have similar zoning. Possibly because these towns and developments are not that old and were purpose-built. Intrawest who developed Whistler, was involved in the development of Mont Tremblant.

The Member of Parliament for Whistler is “working” to bring the uniqueness to the attention of the Canadian Government informing them of how the UHT is affecting Whistler. In 2024, a Whistler realtor went to Ottawa and explained the situation about quarter shares and Phase 2 properties to Parliament. Not surprisingly, nothing has changed.

Whistler accountants and rental property management companies have requested a ruling from the GOC regarding rental properties and properties used for business income. The zonings in question are Phase 1, Phase 2, Tourist Accommodation, and fractional ownership. Nothing is mentioned in the UHT Act about this segment of non-resident owners.

Since the introduction of the UHT, the first batch of UHT returns have now been filed. Local accountants do not seem hopeful that there will be any changes coming.

More Questions and Answers on UHT

Since the UHT Act came into action, a few Whistler accountants have been working overtime to understand and to keep current on UHT Act. This is the accountant that I work with and refer my clients to when a question on UHT is raised. This is the accountant that you, too should be working with. In the interim the GOC has prepared a mind-numbing page of Questions and Answers about UHT.

Next Steps

Buying real estate in Whistler, whether ski-in/ski-out or not, is a smooth process when working with an experienced Whistler real estate agent who follows the rules. Everything in real estate, except for writing the contract and the negotiation is a process. Experienced realtor, and skilled negotiator, Marion Anderson will work with you directly from start to finish. No assistants are involved.

If you think I would be a good fit to work with you and your family, and you are not already working with a Whistler realtor, please contact me. I look forward to hearing from you.

It’s a Good Life in Whistler!

Marion

Marion Anderson Personal Real Estate Corporation

marion@WhistlerSkiinSkiout.com (604) 938-3885