The Canada Revenue Agency has created a workaround to address an issue with the Underused Housing Tax online form that was preventing island cottagers from filing.
Craig Hunter is an American cottager who owns an island on Rainy Lake in Ontario. The lake is dotted with small islands on both sides of the Canada-U.S. border, and his island cottage is on the Canadian side.
Since 2022, non-Canadian property owners must file Underused Housing Tax—an annual federal one per cent tax on the ownership of vacant or underused housing in Canada. There are exceptions, however, for seasonal-use properties and those that are seasonally inaccessible. To qualify for this exception, Hunter still has to file a UHT tax form.
Here’s why cottagers may need to file a Underused Housing Tax form for 2022
There are multiple ways to file the form, including through an online portal, or by downloading the file, printing it, and sending it to the CRA by physical mail.
Hunter opted to file using the online portal, but quickly ran into problems. On the form, line 200 requires entry of the physical address of the property. Since the Hunter’s property is an island only accessible by water, their physical address is actually an island designation—a letter followed by four numbers—that appears on official documents such as their tax bill.
“We got to the point of entering the physical address for the island,” Hunter says. “But you can’t do it, because it requires you to first enter the postal code.” Line 220 on the form asks for a postal code, but Hunter says none of the island postal codes popped up.
“Whatever postal code you enter for Fort Frances, Ontario, the only menu you have access to is for land addresses,” he says. “None are islands.”
As it turns out, the CRA relies on postal code information from Canada Post to populate the list of addresses.
“Unfortunately, there may be some postal codes that are not in our system until Canada Post updates their file and shares it with the CRA,” says Kim Thiffault, a spokesperson with the CRA.
Hunter says neighbours reported running into the same problem. Some of the island cottagers considered putting in a general post office code for Fort Frances, or maybe the address for the marina where they park their boats on the Canadian side. But that’s not their address, so they didn’t.
“One of the questions at the end of the forum is, is everything in the form accurate? If you put [another address] no, that would not be accurate,” he says.
According to Thiffault, users can now manually input an address in line 200, and a postal code in line 220, for the UHT-2900 electronic form.
Now that this hurdle has been removed, islanders can use the form for online submission by manually inputting the address. Unfortunately for Hunter the change came a little too late, he already performed the more cumbersome process of filing by paper.
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