Tuesday March 21 2023

Taxes in co-ownership: save time and money from taxpayers!

For the past few years, Syndicates of Co-ownership have had a series of new tasks and costs imposed with the introduction of various bills projects, notably including Bill 16. This is by no means the end of the story, as a new government regulation is expected to arrive shortly to make certain measures of Bill 16 applicable, which will further increase the workload of many administrators, most of whom are volunteers.

As a management company, SolutionCondo files annual taxes for the Syndicates of Co-ownership they manage. Technically, all Syndicates should do so since a Syndicate is considered a “business” according to fiscal laws and must therefore produce annually a T2, a T1044 (federal) and a CO-17.SP (provincial). That said, this requirement is counter-intuitive for many people, as Syndicates do not have taxable income since, in the vast majority of cases, all their income comes from the Co-owners of the Syndicate.

Furthermore, beyond the waste of money (or time) from Syndicates to comply with the law and file their tax returns annually, I think that there is a huge waste of time for public employees to review these returns. It seems to be a very poor way to spend taxpayers’ money having hundreds of thousands of tax returns reviewed that don’t, and never will, bring a dime to the government. Its bureaucratic paper shuffling that really should be abolished.

Today, many self-managed Syndicates probably do not file their tax returns, more out of ignorance than out of desire to break the law. Although they cannot be told to break the law, my desire not to waste government revenues makes me want all Syndicates to remain ignorant on this matter, because I tell myself that the supposed penalties the law may impose will never occur to the “offenders”. Indeed, if the government were to assign employees of the Canada Revenue Agency or Revenu Québec to identify “offenders” to charge them penalties for not filing when they will not be collecting any additional tax revenue, it would be a very poor allocation of government resources.

In business, we often try to cut processes with no added value. The Governments of Canada and Québec here have a great opportunity to be proactive to save time and money for Syndicates, but also for all taxpayers. The solution is simple, change the rules and exempt Syndicates of Co-ownership from filing tax returns!