A Condo Tax Refresher A lthough condominium cor porat ions in Ca nada a re non-profit corporations, there are
BY STEPHEN CHESNEY
still tax implications and annual filings that are quite often being overlooked. This can become a costly omission on behalf of the condominium
corporation or those responsible for preparing and/or filing the required returns. There can be late filing fees as well as interest on taxes that are not reported and remitted to the government as required. It is for that reason that a refresher is needed, and each condominium corporation’s board of directors and management should take some time to ensure that all required taxes are collected and all required tax and information returns have been filed. Although condominium corporations are considered tax exempt corporations under Section 149(1) (L) of the Income Tax Act of Canada, each and every condominium corporation has the obligation to file a T2 corporation income tax return within six months of its fiscal year end. While there are no income taxes payable given the tax-exempt status, the T2 return is required and the government does expect this to be filed each year. There would be a late filing penalty for this tax return; however, it is based on taxes owing and, as mentioned above, a condominium is tax-exempt. There have been many cases where a condominium corporation has not filed this
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tax return for many years and then it has incurred great costs to pay for these returns to be prepared and filed. The takeaway from this is to ensure that the corporation applies for and receives a business number immediately after registration and that the T2 tax return is filed for every year. Another often forgotten requirement is the filing of the T1044 nonprofit organization information return. If a condominium corporation has over $10,000 of ancillary income, such as interest and rents during a fiscal year, or it has assets of more than $200,000 in the previous fiscal year, it must file this information return within six months of its year
