New Federal Acts Impacting Some Sun Peaks Owners

Important Message for all Sun Peaks Residential Property Owners

This information is not intended to provide legal or accounting advice to property owners, but the Municipality wishes to alert property owners of possible taxation and penalty consequences arising from recent Federal government legislation.

Are you a non-Canadian residential property owner or a Canadian residential property owner who owns property corporately or through a trust or partnership?  If so, you are an ‘affected’ owner and you may be required to pay this tax. Please review the official Government of Canada information provided on the Canada Revenue Agency (CRA) website.

Canada Revenue Agency website.…

Underused Housing Tax Act 

This new Federal law imposes a tax of 1% of the assessed value and is retroactive to January 1, 2022.  Unless your property was rented at ‘arms length’ on a monthly lease for at least 6 months in the 2022 calendar year or if the property is a vacation home that you or your immediate family members personally used for at least 28 days in 2022, you will be required to pay a tax of 1% of the assessed value to the Federal Government.   Short-term or vacation rentals will not be considered as monthly leasing. Sun Peaks is considered an ‘eligible’ community where ‘affected’ property owners are exempt from this tax if they meet the above conditions each year.

All non-Canadian residential property owners and Canadian corporate, trust and partnership held residential property owners must file a 6 page CRA form by April 30, 2023 for each residential property owned even if no taxes are due.  (form UHT 2900) You must have a social insurance number (SIN) or an individual tax number (ITN). If you don’t have one of these, you should immediately apply as it takes up to 60 days to receive either. Failure to file has a minimum fine of $5,000.

There is no clear information as to how a property owner could prove that they occupied their vacation home for 28 days per year or rented long term for at least 180 days in the calendar year.  CRA would only say that owners should keep written records and make sure that other parties, i.e. neighbours/property managers could confirm your presence at your vacation property or provide rental lease details.

When questioned, CRA officials did not know if a condo-hotel property in the Village Core that pays ‘split classification’ property taxes would be considered a business property. When asked about properties zoned ‘tourist accommodation’, it was suggested that if these properties pay residential property taxes, the properties are residential properties. Some accounting firms advice suggests that hotel properties would be exempt. Asked if there were any ‘hardship’ provisions due to Covid travel restrictions for the 2022 year, CRA responded that the Government made its intent known in the Fall of 2021 so owners should have been aware.

Prohibition of the Purchase of Residential Property by Non-Canadians Act

This is a second Federal Act that impacts Sun Peaks.  This Act prohibits Non-Canadians from purchasing residential property in Canada for the next two years, effective January 1, 2023.  Sun Peaks, Silver Star and Apex resorts are the only resorts in B.C. to be impacted by this Act.  We believe that it is an administrative technical oversight, however after numerous telephone calls, letters, and assistance from Members of Parliament, we have not received any acknowledgement that an error has occurred.  We trust that there will be recognition that this is a technical error and that it will be corrected.  Hopefully before it impacts projects presently in the approval stage and local employment in the construction industry.

Mayor and Council Comments 

We are disappointed that the Federal government has targeted resort communities with these two Acts. Sun Peaks has always welcomed foreign property owners and visitors. The Provincial All Seasons Resort Policy encourages tourist accommodations. The Province has engaged with Federal officials to explain why foreign owners are an important part of the Provincial resort tourism strategy. The failure to recognize that many foreign owners were unable to travel to Sun Peaks due to Covid travel restrictions during the 21/22 winter season is grossly unfair.

The Municipality understood in 2022 that these regulations would not apply to recreation/resort and rural areas.  We never received notice at any time from any Federal government agency nor were we advised by any tourism associations of the Government’s intent. We understood that the Canadian Ski Council did make representations on behalf of the ski communities in 2022 and also understood that these two Acts would not apply to recreation/resort communities.  The regulations were only finalized and released on December 22nd, 2022.  In fairness to foreign property owners, the Underused Housing Act should have been applicable in 2023 following the release of the detailed regulations.   

Sun Peaks recognizes the challenges of employee housing and we are pushing for restricted employee only housing solutions. The measures as proposed by the federal government will not assist as employees are not able to compete with long term or short-term vacation home buyers.  The Sun Peaks solution is restricted employee only rental and ownership properties and we are working on this.

The Underused Housing Act appears to address issues in urban centres but it sends the wrong message to foreign property owners and visitors in resort communities.  As a community, Sun Peaks welcomes our many guests and foreign workers from around the world.  You are part of what makes Sun Peaks a great community to live, work and play.  Foreign workers and ownership play an important role in our Sun Peaks’ economy and our community’s social fabric. If the media reports are correct, we have more foreign owners as a percentage of total properties than any community in Canada. We trust that the actions of our national government will not diminish your support for Sun Peaks and British Columbia as your second home.  You will always be welcome in our community!!  We will continue to work to have these regulations amended.     

For further information or comments, please contact:

Frank Caputo, Kamloops - Thompson - Cariboo Member of Parliament

The Honourable Ahmed Hussen, Minister of Housing and Diversity and Inclusion