Exemption for Vacation Properties: Manual Place-search Instructions

Underused Housing Tax Notice UHTN14

March 2023

Except as otherwise noted, all statutory references in this publication are to the provisions of the Underused Housing Tax Act (UHTA) and its regulations. The information in this publication does not replace the law found in the UHTA and its regulations.

Table of Contents

• Introduction
• Definitions
• When is a manual place search necessary
• Steps to prepare the GeoSearch interactive mapping application
• Steps for conducting a place search
• Steps for determining if an area is a specified census agglomeration
• Examples
• Keeping records

Introduction

Paragraph 6(7)(m) of the Underused Housing Tax Act (UHTA) (together with section 2 of the Underused Housing Tax Regulations) provides an exemption for residential properties located in prescribed areas that meet prescribed conditions. This exemption is commonly known as the vacation property exemption.

Whether a residential property is located in a prescribed area of Canada for purposes of the vacation property exemption is based on geographic areas that are established by Statistics Canada as a result of taking a census of Canada’s population. Statistics Canada produces and maintains various lists, tables and maps with respect to these geographic areas. Although the CRA is responsible for the administration of the UHTA and its regulations, the CRA has no authority over Statistics Canada’s lists, tables and maps.

Definitions

Generally, a prescribed area is an area that is any of the following:

• outside both a census metropolitan area and a census agglomeration
• inside a census agglomeration that is not a specified census agglomeration
• inside a census metropolitan area or specified census agglomeration, but outside a population centre that is part of such an area or agglomeration

In this notice, we use the term eligible area to refer to a prescribed area.

Census metropolitan areas, census agglomerations and population centres are statistical areas defined by Statistics Canada.

A census metropolitan area is an area formed by one or more adjacent municipalities centred on a population centre. A census metropolitan area has a total population of at least 100,000 residents, of which 50,000 or more residents live in the core population centre.

A census agglomeration is an area formed by one or more adjacent municipalities centred on a population centre. A census agglomeration has at least 10,000 residents living in the core population centre.

For purposes of the vacation property exemption, a specified census agglomeration is a census agglomeration that has a total population of at least 30,000 residents.

A population centre is an area that has a population of at least 1,000 residents and a population density of 400 persons or more per square kilometre.

When is a manual place search necessary

The CRA has developed an online tool that will help you determine if your residential property is located in an eligible area of Canada for the purposes of the vacation property exemption. It is important for you to perform this verification each year before claiming the vacation property exemption on your return. To use this tool, go to Underused housing tax vacation property designation tool.

In rare situations, the CRA’s Underused housing tax vacation property designation tool will be unable to determine whether your residential property is located in an eligible area for purposes of the vacation property exemption. In such situations, you will have to conduct a visual inspection of the Statistics Canada’s GeoSearch map to determine whether your residential property is located in an eligible area.

If your residential property is not located inside a population centre, then your residential property is located in an eligible area for purposes of the vacation property exemption.

If your residential property is located inside a population centre, you must determine whether the population centre is inside a census metropolitan area or inside a specified census agglomeration. If the population centre is inside a census metropolitan area or inside a specified census agglomeration, your residential property is not located in an eligible area for purposes of the vacation property exemption. If the population centre is inside a census agglomeration that is not a specified census agglomeration, your residential property is located in an eligible area for purposes of the vacation property exemption.

If you determine that your residential property is located in an eligible area of Canada using the Statistics Canada’s GeoSearch map, we recommend that you print the page and keep it with your records.

Steps to prepare the GeoSearch interactive mapping application

Step 1

Open the Statistics Canada’s GeoSearch interactive mapping application in your web browser. Once the application is open, a map of Canada appears. Above the map, is a search field with filter buttons.

The search field, which is located at the top left corner, allows you to enter a place name or postal code. It is circled in red in the image below. Do not enter anything in the search field at this time.

Step 2

To the right of the search field, there are buttons that provide filter options for the search. Hover your cursor over each button for an explanation of the filter option.

The Vintage options drop-down box allows you to select the year of the Census geographic reference period. It is circled in red in the image below. Ensure the year 2021 appears in the drop-down box. If the year 2021 does not automatically appear, click on the drop-down box and select 2021 from the list of years.

Step 3

To the right of the search field, find the Options and preferences button. It is circled in red in the image below. This button is used to define search criteria, related geographies and preferences.

Step 4

Click on the Options and preferences button. This will open a pop-up window with three tabs that will overlay the map of Canada. Under the Search tab, which is circled in red in the image below, ensure a check mark appears in only the Place Names (Place) box.

If check marks appear in other boxes, click on each of the other boxes to make the check mark disappear.

Step 5

Click on the Related geography tab, which is circled in red in the image below. Ensure check marks appear in only the following two boxes:

• Census metropolitan areas or census agglomerations (CMACA)
• Population centres (POPCTR)

If check marks appear in other boxes, click on each of the other boxes to make the check mark disappear.

Step 6

Click on the Preferences tab, which is circled in red in the image below. The following two options will appear:

• Zoom automatically to the selected geographic area
• Enable/Disable additional geographic areas drop-down list

Ensure that both of these options are selected and that the word On appears in the Results based on specific name and geographic reference period drop-down box, which is circled in gold in the image below.

Step 7

Click on the OK button at the bottom right corner of the pop-up window to save your options and preferences. The button is circled in red in the image below.

Step 8

After clicking the OK button, the pop-up window closes and the map of Canada reappears. In the bottom right corner, below the map, is the Additional geographic areas drop-down box, which allows you to overlay another geographic level on the GeoSearch map. It is circled in red in the image below. This feature was enabled in Step 6.

Step 9

Click on the Additional geographic areas drop-down box and select Population centres (POPCTR), which is circled in red in the image below.

All of the population centres in Canada now appear as orange dots on the GeoSearch map.

Steps for conducting a place search

Step 10

At the top left corner, above the map, in the search field that indicates Place name or postal code, enter the name of the locality, such as the community, village, hamlet, town or city where your residential property is located. The search field is circled in red in the image below.

Step 11

As you enter the name of the locality in the search field, a list of results will start to generate below the search field. Depending on the name you enter and how common that name is, you might see the words More choices at the bottom of the list. If, at first, you do not see the name of the place where your residential property is located, click on More choices.

Step 12

Click on the applicable place generated in the list of results below the search field. The GeoSearch map should reposition to the vicinity where your residential property is located.

Step 13

To the left of the map, a Related Geography for window will appear. It is circled in red in the image below.

If the place you selected in Step 12 is inside a census metropolitan area or a census agglomeration, the Related Geography for window will display a bullet called Census metropolitan areas or census agglomerations. The name of the census metropolitan area or census agglomeration will appear below the bullet.

Names of census metropolitan areas are followed by [CMA] and names of census agglomerations are followed by [CA].

If the place you selected in Step 12 is inside or near a population centre, the Related Geography for window will display a bullet called Population centres. The names of the population centres or the names of any nearby population centres will appear below the bullet.

Step 14

If the place you selected in Step 12 is inside a census metropolitan area or a specified census agglomeration, you should conduct a visual inspection of the GeoSearch map to confirm whether your residential property is located inside or outside a population centre.

To begin such an inspection, place your cursor on the GeoSearch map and click on your mouse. While your mouse is still in the clicked position, drag the GeoSearch map so that the vicinity where your residential property is located appears near the middle of your screen.

Use your mouse (or click on the Zoom in or + button on the left side of the GeoSearch map) to adjust the size of the map on your screen. Continue to zoom in until street names appear on the GeoSearch map.

Find the street on which your residential property is located, then find the location of your residential property on the street. If needed, reposition the GeoSearch map on your screen.

Step 15

If your residential property is located inside a population centre, it will be inside an area that is enclosed by an orange border on the GeoSearch map. The orange border outlines the boundary of the population centre.

Your residential property is not located in an eligible area for purposes of the vacation property exemption if both of the following conditions are met:

• your residential property is inside a population centre
• the population centre is inside a census metropolitan area or inside a specified census agglomeration (steps 16 to 18 explain how to determine if an area is a specified census agglomeration)

In any other case, your residential property is located in an eligible area for purposes of the vacation property exemption.

Steps for determining if an area is a specified census agglomeration

Step 16

As explained in Step 13, if the place you selected in Step 12 is inside a census agglomeration, the Related Geography for window will display a bullet called Census metropolitan areas or census agglomerations. The name of the census agglomeration will appear below the bullet followed by [CA].

Step 17

Click on the name of the census agglomeration in the Related Geography for window. This should open a table below the GeoSearch map with the title Results for [name of census agglomeration], [name of province] – 2021 Census only. The first item in the table should be a link called Census Profile, 2021 Census of Population.

Step 18

Click on the link Census Profile, 2021 Census of Population. This should open a new window with the title Census Profile, 2021 Census of Population. The first item in the table should be the total population of the census agglomeration for the 2021 Census.

Examples 3 and 4 show how to determine if an area is a specified census agglomeration.

Examples

Keeping records

Every affected owner of a residential property must keep records to enable the determination of their obligations and liabilities under the UHTA. Generally, you must keep the records for six years from the end of the year to which they relate.

If you do not have adequate records to support that your ownership of a residential property is exempt from the underused housing tax for a calendar year, the CRA may disallow your exemption.

Further information