Underused Housing Tax: Ended Going Forward, What Still Applies to Past Years

The federal Underused Housing Tax (UHT) has ended for current and future years, but not for the years it was in force. In short: Affected owners don't file a return or pay the federal Underused Housing Tax (UHT) for 2025 and later calendar years, but the requirement to file and pay still applies for 2022 to 2024; the tax was generally paid by non-resident owners who aren't Canadian citizens or permanent residents, and individuals who are citizens or permanent residents were excluded owners with nothing to file.

This page explains what still applies, from the Canada Revenue Agency’s UHT pages and notices. It is part of the real estate tax hub. Provincial and city vacancy taxes are separate and still apply: see the B.C. speculation and vacancy tax, vacant home taxes in Toronto, Vancouver and Ottawa and Toronto’s Vacant Home Tax.

Current status

• No UHT return or tax for 2025 and later calendar years (Budget 2025 Implementation Act, No. 1, royal assent March 26, 2026).
• The requirement to file a return and pay the tax still applies to 2022 to 2024.

Source: CRA, Introduction to the Underused Housing Tax (UHTN1).

What the tax was, and who it applied to

• The UHT was an annual 1% tax on the ownership of vacant or underused housing in Canada, in effect from January 1, 2022.
• Each affected owner applied the 1% rate to the property's value (its taxable value or its fair market value) and then to their own ownership percentage.
• It was generally payable by non-resident owners who are not Canadian citizens or permanent residents; some Canadian corporations, partners and trustees also had to file, mainly for 2022.
• An individual who is a Canadian citizen or permanent resident is an excluded owner, with no return to file and no tax, even if they don't live in Canada.
• Starting with 2023, most Canadian owners of residential property, including specified Canadian corporations, partnerships and trusts, don't file or pay.

An owner who wasn’t an excluded owner on December 31 of a year was an affected owner for that year. The tax covered residential property in Canada: detached houses with no more than three dwelling units, semi-detached houses, rowhouse units and residential condominium units, including cottages and laneway houses. Buildings such as quadruplexes, high-rise apartment buildings, hotels and mobile homes were not residential property for the UHT. The full definitions, including who counts as an owner, are in UHTN1.

Exemptions from paying the tax

An affected owner whose ownership was exempt from the tax still had to file a return for the property. One exemption was qualifying occupancy:

• An affected owner's property was exempt for a year if at least 180 days of it fell in qualifying occupancy periods, each at least one month of continuous occupancy.
• Qualifying occupants are a tenant under a written agreement (one who isn't at arm's length must pay at least fair rent), the owner or spouse living there to work under a Canadian work permit, or the owner's spouse, parent or child who is a Canadian citizen or permanent resident.

Other exemptions covered a property used as a primary place of residence, a vacation property in an eligible area of Canada, a property not suitable for year-round use or seasonally inaccessible, an uninhabitable or newly constructed property, a new owner, and a deceased owner or their personal representative or co-owner; from 2023, an employee accommodation in an eligible area was added. Each has conditions set out in CRA’s UHT notices, such as UHTN7 on qualifying occupancy.

If you have an unfiled return for a past year

• The return and any tax were due April 30 of the following calendar year.
• Not filing on time brings a minimum penalty of $1,000 for an individual and $2,000 for a corporation.

The return is Form UHT-2900, one for each property. Interest also applies to tax not paid by the due date, and CRA says the original minimum penalties were reduced, in a change that applies starting with the 2022 calendar year (what has changed). Affected owners generally have to keep records for six years from the end of the year they relate to. For the deadlines and penalty details, see CRA’s when to file the return and pay the tax.

Related pages

• Real estate taxes in Canada
• B.C. speculation and vacancy tax
• Vacant home taxes in Canada
• Non-resident property tax in Canada