When it comes to policy, we know there can always be unintended consequences — even on the items that are not at the top of the docket list.
One of these items that has slipped under the radar for many is the Underused Housing Tax (UHT). The tax was initially developed and targeted at urban centres, but as John Barlow, Alberta MP for Foothills, and shadow minister for Agriculture, Agri-Food, and Food Security for the Conservative Party of Canada says, it has created a lot of unintended consequences for rural Canadians.
“Most farm and ranch families have multiple homes on their property. Whether that’s grandma or grandpa, or your hired hand, or temporary foreign worker, seasonal workers, etc., all of these homes, if they are not lived in for six months of the year, will be facing a 1 per cent market value tax,” Barlow explains, noting this could equal to tens of thousands of dollars, depending on the unit.
So if you have a number of houses, each one of those could be hit with this tax. The caveat, says Barlow, is that even if this tax doesn’t apply to you, because the homes are being used, you still have to file the paperwork. Ignoring the paperwork isn’t an option either, as you are opening up your operation to a fine, which could fall anywhere between the five and ten thousand dollar fine per home.
“This isn’t a slap on the wrist, this is a significant hammer coming down from the CRA,” he notes.
This is the first year the tax has been implemented, with not much of an explanation to taxpayers on why. Barlow himself only had it brought to his attention in December, and when he brought it to the House of Commons last week, he says there seemed to be some confusion surrounding it — despite the impacts it can have.
“The government response was they had no idea what I was talking about, which is even more concerning, that they don’t realize the impact this is going to have. So now it’s on their radar,” he says.
The Conservatives are asking the government to rethink this tax, or at the very least, consider an exemption for agricultural parcels.
Check out the full conversation, filmed at the Alberta Beef Industry Conference at Banff, Alberta, below: