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Escape Room 2 – The NEW Real Estate Owner Tax Game – High Stakes Edition


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By Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr – CEO | Director of CGL Tax

Justin time for Tax Season, we have a new version of our most popular game, but this time you are now trying to convert your Real Estate to tax-Freeland.

No those are not typos.

In 2017, we released Escape Room – The NEW Small Business Tax Game – Family Edition after then Federal Liberal Finance Minister, Bill Morneau, finally released the new version of

the Tax on Split Income (“TOSI”) or the so-called “income sprinkling” rules.

This time, in this game, there are fewer unconditional exits, and the stakes are higher.

So just like I said in December 2017:

“These rules are written like a bad “escape room” game. The way these rules are written, everyone is caught… unless you can escape… and the exits are not clearly marked.”

The talking points in the media have been that the Underused Housing Tax (UHT) Act would only apply to non-resident and foreign owners.

However, what they failed to mention is that many Canadians will be caught by the filing requirement and will have to file or face penalties, even if they won’t owe any tax.

This ain’t your Daddy’s failure to file penalty.

Failing to file a UHT return faces a minimum penalty of $5,000 per individual, per property and  $10,000 if you are a corporation.

This makes the failure to file a T1135 Foreign Property form look like pocket change.

So while you may not have to pay any UHT, you still might have to pay even more if you didn’t know you had to file it already this tax season because:

  • the Underused Housing Tax Act is not part of the Income Tax Act;
  • there are requirements to file even if you don’t owe;
  • it is due on April 30 irrespective of your ordinary income tax filing deadline
  • the filing is entirely separate from any other tax filing; and
  • at the time of this article’s publication, it cannot be e-filed – it must be filled out and sent manually.

The prescribed Form UHT-2900 only came out on January 31, 2023, and applies to 2022.

As a result, you will need to figure out if you must file it by April 30 this year or face a minimum $5,000 penalty, per person, per property, for failure to file.

As this is new legislation with large penalty amounts, some practitioners are unaware if their errors and omissions insurance even includes coverage for these returns. This means you can expect to see extremely high fees for preparing these forms.

Can you think of a better way to navigate the messy rules than by playing a game for you to play this Tax Season?

Escape Room 2 – Rules of the Game

IMPORTANT RULES OF THE GAME: This is not an all-inclusive list. The below information is a high-level summary of the more common areas of concern. You should seek specialist advice on your specific circumstances and how the new rules will apply to you.

1) Were you the legal owner (a person/entity registered on title)jointly or otherwise, of a residential property in Canada as of December 31?

If yes, you are still trapped and get to keep playing.

If not, Congrats! You escaped! You can go back to paying rent or sleeping in your vehicle without having to worry about the UHT.

2) Are you a publicly-traded Trust or Corporation that is incorporated under the laws of Canada or a province and listed on a Canadian Stock Exchange?

If yes, Congrats! You escaped! You may continue working on your Securities filings for your upcoming AGM.

If not, you’re still trapped – keep playing.

3) Are you a Registered Charity, Cooperative Housing Corporation, Municipality, Indigenous Governing Body, Government of Canada, Provincial Government, University, Public College, School Authority or Hospital Authority? 

If yes, Congrats! You escaped! You may continue dealing with your annual audit of financial statements.

If not, you’re still trapped – keep playing.

4) Are you an individually wealthy person that does not like to share with others?

For example, you own one or more multiple residential properties – but every single one of them is only in your personal name. No spouse, no corporation, no trust, no partnerships, no friends, no one!             

If yes, Congrats! You escaped! You may go back to swimming alone in your pool of wealth.

If not, you’re still trapped – keep playing.

5) Is the only reason you are on the land title because you are currently the executor or administrator of someone’s estate? 

If yes, Congrats! You escaped! You may continue to grieve and fill out the mountains of government paperwork while everyone else asks you “where’s my inheritance?”

If not, you’re still trapped – keep playing.

6) Are you an individual Canadian Citizen or Permanent Resident of Canada (under the Immigration and Refugee Protection Act) that does not have a business, farm, or rental property owned with another person that could possibly be viewed as a partnership?

If yes, Congrats! You escaped! You may continue to live in your home, paycheque to paycheque, while your cost of payroll deductions and mortgage interest continue to rise and eat away at it.

If not, you’re still trapped – keep playing.

7) Does your business, farm, or rental property co-owned with another person have a residential dwelling on it? 

For example, is your home on the same land title as your farmland or business?

If yes, Congrats! … haha – fooled you! You’re still trapped, and now you get to play the UHT Escape Room Game – Advanced Edition

If not, Congrats! You just made it out – lucky number 7!

Welcome to UHT Escape Room Game – Advanced Edition

In this Edition, everyone must file or face a minimum $5,000 penalty per person on each property.

For example, husband/wife partnership with three residential properties = 2 x 3 x $5,000 = $30,000 penalty if you don’t file!

8) Are you a Specified Canadian Corporation where at least 90% of the ownership and control (direct and indirect) are held by other Specified Canadian Corporations, Canadian Citizens, or Permanent Residents of Canada?      

If yes, you have to file but you won’t have to pay. Don’t forget to file by April 30 no matter what your fiscal year-end date is!

If not, you’re still trapped – keep playing.

9) Are you a Specified Canadian Partnership where every member of the partnership is either a Specified Canadian Corporation, or would not have to file if we ignored the whole “partner of a partnership” thing?     

If yes, Congrats! You have to file but won’t have to pay.

If not, You’re still trapped – keep playing.

10) Are you a Specified Canadian Trust where every beneficiary of the trust is either a Specified Canadian Corporation, or would have escaped from filing if they were the owner themselves?

If yes, Congrats! You have to file but won’t have to pay.

If not, You’re still trapped – keep playing.

11) In this filing year or last year, were you an owner of a property when another co-owner that owned 25% or more died?        

If yes, Congrats! It’s sure a good thing they died! You have to file but won’t have to pay

If not, you’re still trapped – keep playing.

12) Did you die this year or last year (or are you the executor for someone that did and you were not on the land title before they died)

If yes, then UHT definitely puts the FUN in FUNeral! You have to file, but won’t have to pay – don’t forget to play again next year!

If not, you’re still trapped (but alive) – keep playing.

13) Did you buy the property this year and never owned or had your name on it before in the past decade?  

If yes, Congrats on becoming a home-owner, on your first… or second… or third… or… well it doesn’t matter how many homes you have, just as long as you bought it this year. You have to file but don’t have to pay – play again next year!

If not, you’re still trapped – keep playing.

14) Was the property still under construction before April Fools’ Day of the filing year?          

If yes, Congrats – this isn’t an April Fools’ prank. You have to file, but don’t have to pay!

If not, You’re still trapped – keep playing.

15) Was the property finished before April Fools’ Day of the filing year, offered up for sale to the public, but never sold or occupied by an individual as a place of residence or lodging during the year?  

If yes, Congrats! Isn’t it fun making mortgage payments on a home no one wants? You have to file but don’t have to pay.

If not, you’re still trapped – keep playing.

16) Was the property unable to be lived in for at least 120 consecutive days because of renovations undertaken that occurred in a timely fashion?  

If yes, Congrats! As long as you haven’t used this escape door in the last decade, you can now use it. You have to file but don’t have to pay – otherwise, it’s still locked and you keep playing.

If not, you’re still trapped – keep playing.

17) Was the property unable to be lived in for at least 60 consecutive days in the year because of disaster or hazardous conditions caused by circumstances outside the reasonable control of an owner?             

If yes, Congrats! As long as you haven’t used this escape door more than once before for the same disaster or hazardous condition on the property you have to file, but not pay – otherwise, you’re still trapped.

If not, you’re still trapped – keep playing.

18)  Is the property unable to be accessed year-round because there is no maintained public access during the off-season? 

If yes, Congrats! You have to file but don’t have to pay.

If not, you’re still trapped – keep playing.

19) Is the property unsuitable for year-round use as a place of residence?        

If yes, Congrats! Keep following that boiled water advisory and burning everything around you to stay warm. The government is providing you with more blessings: you have to file but don’t have to pay.

If not, you’re still trapped – keep playing.

20) Is the property being used for at least a month consecutively and more than 180 days in the year by you, your spouse or common-law partner, child, or parent who is a Canadian citizen or permanent resident? 

If yes, Congrats! You have to file but don’t have to pay – wasn’t this fun? – Be sure to play again next year!

If not, you’re still trapped – keep playing.

21) Is the property the primary residence for you, your spouse or common-law partner, or for your child attending a designated learning institution? 

If yes, Congrats! You might have to file an election and your spouse must agree. If you need to convince them, tell them that marriage counselling will be cheaper than the failure to file penalty. That should get them to agree to anything. You have to file but don’t have to pay.

If not, you’re still trapped – keep playing.

22) Is the property a vacation property that is used by you or your spouse or common-law partner for at least 28 days in the year and is located in an “eligible area of Canada” (basically rural enough area where they might get dirty trying to find you)

If yes, Congrats on being able to take 4-weeks of vacation every year – you have to file, but won’t have to pay.

If not, you’re still trapped – and likely still at work – keep playing.

23) Speaking of work – is the property being used by you or your spouse or common-law partner for at least a month consecutively and more than 180 days in the year just while you are working in Canada, and the property relates to that purpose?        

If yes, Congrats! You have to file but won’t have to pay.

If not, you’re still trapped – have you considered renting it out?

24) Is the property being rented under a written agreement for at least a month consecutively and more than 180 days in the year to someone paying at least 5% of the property value per year as rent?     

If yes, Congrats! You have to file but won’t have to pay.

If not, you’re still trapped – keep playing – and raise that rent! We wouldn’t want anyone to have affordable housing.

25) Is the property being rented under a written agreement for at least a month consecutively and more than 180 days in the year to an unrelated person?    

If yes, Congrats! But why are you charging them less than fair-value rent? What kind of slum lord are you? Stop making things affordable! You have to file but won’t have to pay.

If not, you are still trapped and now move on to the UHT Escape Room Game – High Stakes Edition

Welcome to UHT Escape Room Game – High Stakes Edition

In this edition of the UHT Escape Room Game, everyone must ante up and Pay to Play!

26) Is the Fair Market Value of the property lower than both the Property Tax Assessed Value and the most recent purchase price of the property?

If yes, you must have a formal appraisal done effective as of a date in the filing year or before the filing deadline. Then you only have to pay 1% of this value multiplied by your percentage of ownership as your UHT.

If not, either get that appraisal done or be happy that your property has increased in value. In the meantime keep playing.

27) Is the Property Tax Assessed Value more than the most recent purchase price?

If yes, Congrats! Not only has your property tax gone up, but so has your UHT – you owe 1% of this value multiplied by your percentage of ownership.

If no, Congrats on your property being worth less than you paid for it – keep playing.

28) Congrats on making it to the end. If you’ve come this far, it means:

  • You own property in Canada;
  • You are not a Canadian Citizen or Permanent Resident;
  • You are alive, or you’ve been dead for more than two years;
  • You don’t rent out the property under a written agreement …or if you do, it is to a relative, and it is way too affordable;
  • If it is a vacation property, you don’t use it for 4-weeks of vacation likely because you don’t get 4-weeks of vacation;
  • You don’t use the property for more than 30 days consecutively, nor more than 180 days in the year for a work-related purpose;
  • You didn’t bother getting a formal appraisal done;
  • You paid more than the current Property Tax Assessed value for the property; and
  • You wonder why they didn’t just say all this in the first place

Congrats – you get to pay 1% of the purchase price when you last acquired the property multiplied by your percentage of ownership.

Do you feel like you won?

Now… as for next year…

… I want to play a game…

CEO | Director CGL Tax Professional Corporation With the Income Tax Act always by his side on his smart-phone, Cory has taken tax-nerd to a whole other level. His background in strategic planning, tax-efficient corporate reorganizations, business management, and financial planning bring a well-rounded approach to assist private corporations and their owners increase their wealth through the strategies that work best for them. An entrepreneur himself, Cory started CGL with the idea that he wanted to help clients adapt to the ever-changing tax and economic environment and increase their wealth through optimizing the use of tax legislation coupled with strategic business planning and financial analysis. His relaxed blue-collar approach in a traditionally white-collar industry can raise a few eyebrows, but in his own words: “People don’t pay me for my looks. My modeling career ended at birth.” More info:

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Could be a long day tonight — Cam needs coffee

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Brownstone Institute

The Best Life Lesson for a Teen Is a Job

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From the Brownstone Institute


During the Covid debacle, kids were locked out of school or otherwise condemned to an inferior Zoom education for up to two years. What were the alternatives? Unfortunately, since the New Deal, the federal government has severely restricted teenagers’ opportunities for gainful employment. But new evidence proves that keeping kids out of work doesn’t keep them out of mental health trouble.

Yet suggesting that kids take a job has become controversial in recent years. It is easy to find expert lists on the dangers of teenage employment. Evolve Treatment Center, a California therapy chain for teenagers, recently listed the possible “cons” of work:

  • Jobs can add stress to a child’s life.
  • Jobs can expose kids to people and situations they might not be ready for.
  • A teen working a job might feel like childhood is ending too soon.

But stress is a natural part of life. Dealing with strange characters or ornery bosses can speedily teach kids far more than they learn from a droning public school teacher. And the sooner childhood ends, the sooner young adults can experience independence – one of the great propellants of personal growth.

When I came of age in the 1970s, nothing was more natural than seeking to earn a few bucks after school or during the summer. I was terminally bored in high school and jobs provided one of the few legal stimulants I found in those years.

Thanks to federal labor law, I was effectively banned from non-agricultural work before I turned 16. For two summers, I worked at a peach orchard five days a week, almost ten hours a day, pocketing $1.40 an hour and all the peach fuzz I took home on my neck and arms. Plus, there was no entertainment surcharge for the snakes I encountered in trees while a heavy metal bucket of peaches swung from my neck.

Actually, that gig was good preparation for my journalism career since I was always being cussed by the foreman. He was a retired 20-year Army drill sergeant who was always snarling, always smoking, and always coughing. The foreman never explained how to do a task since he preferred vehemently cussing you afterwards for doing it wrong. “What-da-hell’s-wrong-with-you-Red?” quickly became his standard refrain.

No one who worked in that orchard was ever voted “Most Likely to Succeed.” But one co-worker provided me with a lifetime of philosophical inspiration, more or less. Albert, a lean 35-year-old who always greased his black hair straight back, had survived plenty of whiskey-induced crashes on life’s roller coaster.

Back in those days, young folks were browbeaten to think positively about institutions that domineered their lives (such as military conscription). Albert was a novelty in my experience: a good-natured person who perpetually scoffed.  Albert’s reaction to almost everything in life consisted of two phrases: “That really burns my ass!” or “No Shit!”

After I turned 16, I worked one summer with the Virginia Highway Department. As a flag man, I held up traffic while highway employees idled away the hours. On hot days in the back part of the county, drivers sometimes tossed me a cold beer as they passed by. Nowadays, such acts of mercy might spark an indictment. The best part of the job was wielding a chainsaw—another experience that came in handy for my future career.

I did “roadkill ride-alongs” with Bud, an amiable, jelly-bellied truck driver who was always chewing the cheapest, nastiest ceegar ever made—Swisher Sweets. The cigars I smoked cost a nickel more than Bud’s, but I tried not to put on airs around him.

We were supposed to dig a hole to bury any dead animal along the road. This could take half an hour or longer. Bud’s approach was more efficient. We would get our shovels firmly under the animal—wait until no cars were passing by—and then heave the carcass into the bushes. It was important not to let the job crowd the time available for smoking.

I was assigned to a crew that might have been the biggest slackers south of the Potomac and east of the Alleghenies. Working slowly to slipshod standards was their code of honor. Anyone who worked harder was viewed as a nuisance, if not a menace.

The most important thing I learned from that crew was how not to shovel. Any Yuk-a-Puk can grunt and heave material from Spot A to Spot B. It takes practice and savvy to turn a mule-like activity into an art.

To not shovel right, the shovel handle should rest above the belt buckle while one leans slightly forward. It’s important not to have both hands in your pockets while leaning, since that could prevent onlookers from recognizing “Work-in-Progress.” The key is to appear to be studiously calculating where your next burst of effort will provide maximum returns for the task.

One of this crew’s tasks that summer was to build a new road. The assistant crew foreman was indignant: “Why does the state government have us do this? Private businesses could build the road much more efficiently, and cheaper, too.” I was puzzled by his comment, but by the end of the summer I heartily agreed. The Highway Department could not competently organize anything more complex than painting stripes in the middle of a road. Even the placement of highway direction signs was routinely botched.

While I easily acclimated to government work lethargy, I was pure hustle on Friday nights unloading trucks full of boxes of old books at a local bindery. That gig paid a flat rate, in cash, that usually worked out to double or triple the Highway Department wage.

The goal with the Highway Department was to conserve energy, while the goal at the book bindery was to conserve time—to finish as quickly as possible and move on to weekend mischief. With government work, time routinely acquired a negative value—something to be killed.

The key thing kids must learn from their first jobs is to produce enough value that someone will voluntarily pay them a wage. I worked plenty of jobs in my teen years – baling hay, cutting lawns, and hustling on construction sites. I knew I’d need to pay my own way in life and those jobs got me in the habit of saving early and often.

But according to today’s conventional wisdom, teenagers should not be put at risk in any situation where they might harm themselves. The enemies of teenage employment rarely admit how the government’s “fixes” routinely do more harm than good. My experience with the highway department helped me quickly recognize the perils of government employment and training programs.

Those programs have been spectacularly failing for more than half a century. In 1969, the General Accounting Office (GAO) condemned federal summer jobs programs because youth “regressed in their conception of what should reasonably be required in return for wages paid.”

In 1979, GAO reported that the vast majority of urban teens in the program “were exposed to a worksite where good work habits were not learned or reinforced, or realistic ideas on expectations in the real world of work were not fostered.” In 1980, Vice President Mondale’s Task Force on Youth Unemployment reported, “Private employment experience is deemed far more attractive to prospective employers than public work” because of the bad habits and attitudes spurred by government programs.

“Make work” and “fake work” are a grave disservice to young people. But the same problems permeated programs in the Obama era. In Boston, federally-subsidized summer job workers donned puppets to greet visitors to an aquarium. In Laurel, Maryland, “Mayor’s Summer Jobs” participants put in time serving as a “building escort.” In Washington, D.C., kids were paid to diddle with “schoolyard butterfly habitats” and littered the streets with leaflets about the Green Summer Job Corps. In Florida, subsidized summer job participants “practiced firm handshakes to ensure that employers quickly understand their serious intent to work,” the Orlando Sentinel reported. And folks wonder why so many young people cannot comprehend the meaning of “work.”

Cosseting kids has been a jobs program for social workers but a disaster for the supposed beneficiaries. Teen labor force participation (for ages 16 to 19) declined from 58 percent in 1979 to 42 percent in 2004 and roughly 35 percent in 2018. It’s not like, instead of finding a job, kids stay home and read Shakespeare, master Algebra, or learn to code.

As teens became less engaged in society via work, mental health problems became far more prevalent. The Centers for Disease Control and Prevention found that in “the 10 years leading up to the pandemic, feelings of persistent sadness and hopelessness—as well as suicidal thoughts and behaviors—increased by about 40 percent among young people.”

The troubled teen years are producing dark harvests on campus.  Between 2008 and 2019, the number of undergraduate students diagnosed with anxiety increased by 134 percent, 106 percent for depression, 57 percent for bipolar disorder, 72 percent for ADHD, 67 percent for schizophrenia, and 100 percent for anorexia, according to the National College Health Assessment.

Those rates are much worse post-pandemic. As psychiatrist Thomas Szasz observed, “The greatest analgesic, soporific, stimulant, tranquilizer, narcotic, and to some extent even antibiotic – in short, the closest thing to a genuine panacea – known to medical science is work.”

Those who fret about the dangers that teens face on the job need to recognize the “opportunity cost” of young adults perpetuating their childhood and their dependence. Sure, there are perils in the workplace. But as Thoreau wisely observed, “A man sits as many risks as he runs.”


  • James Bovard

    James Bovard, 2023 Brownstone Fellow, is author and lecturer whose commentary targets examples of waste, failures, corruption, cronyism and abuses of power in government. He is a USA Today columnist and is a frequent contributor to The Hill. He is the author of ten books.

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