Three tax filing changes farmers should know about

By Clint Cameron, Director, Ontario Federation of Agriculture

Tax season is coming up and while it’s always important to stay on top of deadlines and new rules, there are changes to three specific federal tax filing requirements that farmers should pay particular attention to for 2024.

Underused Housing Tax

In 2022, the federal Underused Housing Tax (UHT) Act became law, putting a tax on the value of vacant and underused housing owned either directly or indirectly by people who aren’t Canadian citizens or permanent residents.

For the farming sector, the UHT’s onerous annual filing requirements and steep penalties for non-compliance, which ranged from $5,000-$10,000, were a major concern. Following advocacy from the Ontario Federation of Agriculture (OFA) and other organizations, the federal government announced the following proposed changes in its 2023 Fall Economic statement:

• Exemption for farmers: farm businesses will be exempt from filing the UHT for the 2023 tax year and beyond as long as more than 90% of ownership is by Canadian citizens or permanent residents.
• Lower penalties: minimum penalties for failing to file a UHT return were lowered to $1,000 for individuals and $2,000 for corporations for each UHT return not submitted.

The proposed changes, which would apply for the 2023 tax year and beyond, still need to be introduced and passed through legislation in order to come into effect.

Key takeaway for farmers: UHT still applies for the 2022 tax year, so any farmers who were required to file a UHT return for 2022 but have not yet done so, should file by April 30, 2024 to avoid penalties and interest.