Underused Housing Tax in Canada: Gone for 2025, Still Owing for 2022 to 2024

Underused Housing Tax in Canada: Gone for 2025, Still Owing for 2022 to 2024

Short answer: The underused housing tax (UHT) no longer applies to 2025 or any later year. Bill C-15, the Budget 2025 implementation act, received royal assent on March 26, 2026, and the Canada Revenue Agency (CRA) states plainly that affected owners do not need to file a UHT return or pay the tax for 2025 and subsequent calendar years. If you filed a 2025 return before the law changed, CRA says it will contact you by letter about cancelling it. But the same CRA pages carry the second half of the sentence: the requirement to file and pay still applies to the 2022, 2023 and 2024 calendar years. Those three years are where the exposure sits, because the penalty for a missing return starts at $5,000 for an individual and $10,000 for a corporation, per property, per year, and it applies even when the tax itself would have been zero.

This is education only, not tax advice. UHT status turns on how title is held and on definitions that changed between 2022 and 2023. If the audit checklist near the end of this guide flags your situation, take the file to a Canadian tax professional before you file anything.

What the tax was, for the three years it still covers

The UHT took effect on January 1, 2022 under the Underused Housing Tax Act. It is an annual federal tax of 1% on the value of vacant or underused residential property in Canada, owned on December 31 of the calendar year. CRA described it from the start as a tax that generally targets non-resident, non-Canadian owners, and as a tax that is independent of provincial and municipal taxes on vacant housing. Both halves of that description matter. The first half explains why most individual Canadian homeowners never had to think about it. The second half means the city vacancy taxes discussed later in this guide are separate systems that the federal repeal did not touch.

Residential property for UHT purposes is, in general terms:

• A detached house or similar building with a maximum of three dwelling units, including the related land.
• A semi-detached house, a rowhouse unit, or a residential condominium unit, including the related land.

A fourplex or larger rental building is outside that definition, which is why the UHT mostly landed on houses, duplexes, triplexes and condos. CRA's guidance also carves out a specific condominium case from 2022 onward: a unit in a building with at least four condominium units is not residential property for UHT purposes if one owner holds at least 90% of the units and at least 90% of those units are used to give individuals continuous occupancy of at least one month. That carve-out aside, the unit count on the building is the first test, and most small landlords and foreign owners of single units were squarely inside it.

The timeline: three different filing nets

The single most common error in UHT discussions is treating the four years as one regime. They are not. Parliament narrowed the filing obligation after the first year, then ended it after the third.

Calendar year	Who had to file a UHT-2900	Tax payable	Status in October 2026
2022	The broad net: foreign owners, plus Canadian corporations, trustees and partners, including specified Canadian corporations, partnerships and trusts	1% of value times ownership share, unless an exemption applied; specified Canadian owners were exempt from paying but still filed	Still due. Transitional relief waived penalties and interest for 2022 returns filed and paid by April 30, 2024; that window has closed
2023	The narrowed net: specified Canadian corporations, partnerships and trusts became excluded owners. Remaining affected owners are listed in the next section	1%, unless an exemption applied	Still due; return deadline was April 30, 2024
2024	Same narrowed net as 2023, with added conditions on the vacation property exemption	1%, unless an exemption applied	Still due; return deadline was April 30, 2025
2025 and later	Nobody	No tax	Closed by Bill C-15, royal assent March 26, 2026. Early 2025 filers will be contacted by CRA about cancellation

Read the 2022 row carefully if you hold property through a company or a trust. In the first year, being a fully Canadian, fully compliant structure did not get you out of filing. It got you an exemption from paying, claimed on a return you still had to submit. From 2023, CRA's list of excluded owners includes an owner holding as trustee of a specified Canadian trust, an owner holding as partner of a specified Canadian partnership, and a specified Canadian corporation itself. A specified Canadian corporation is, in simplified terms, a Canadian corporation whose shares are all held by excluded owners or other specified Canadian corporations. One foreign shareholder can be enough to take a private corporation out of that definition, which is why the ownership register, not the mailing address, decides the question.

Excluded owners and affected owners

The Act sorts every owner of residential property on December 31 into one of two boxes.

Excluded owners file nothing and owe nothing. For 2023 and later years, CRA's list includes:

• An individual who is a citizen or permanent resident of Canada, holding the property in their own right (not as a trustee or a partner).
• A specified Canadian corporation, and owners holding as trustees of specified Canadian trusts or partners of specified Canadian partnerships.
• A corporation whose shares are listed on a Canadian stock exchange.
• A registered charity, a cooperative housing corporation, a municipality, a public college, school authority or university, a hospital authority, and similar public bodies.
• An Indigenous governing body, and the federal or a provincial government or its agents.
• A trustee of a mutual fund trust, a real estate investment trust, or a SIFT trust.

Affected owners must file, one return per property. Everyone who owns residential property and is not an excluded owner lands here. In practice the affected group for 2023 and 2024 is:

• Foreign nationals and corporations that are not incorporated or continued in Canada.
• A Canadian citizen or permanent resident who holds the property as a trustee of a trust that is not a specified Canadian trust. The classic case is a bare trust created by putting a relative on title.
• A Canadian citizen or permanent resident who holds the property as a partner of a partnership that is not a specified Canadian partnership.
• A private Canadian corporation that is not a specified Canadian corporation, for example because a non-resident holds some of its shares.
• Trustees and partners generally, in whatever capacity they hold title, where the trust or partnership does not meet the specified Canadian tests.

Two mechanical rules multiply the paperwork. First, an affected owner with several properties files a separate return for each one. Second, where someone owns the same property in more than one capacity, and one capacity is as a partner or a trustee, the Act treats them as a separate person in each capacity, with a separate return for each capacity in which they are an affected owner. Co-owners who are each affected owners each file their own return for the same property.

The title trap: an adult child on title can create a filing duty

CRA's own questions and answers work through the scenario that caught many families. A parent owns a house and adds an adult child on title as a joint tenant. If the child was genuinely given a share of the home, both parent and child are generally excluded owners in their personal capacities, and neither files. If the child was added for estate planning and in substance holds title in trust for the parent, the answer changes: the parent remains an excluded owner, but the child is an owner in the capacity of trustee of a trust, and is therefore an affected owner who must file a return for the property for each year the arrangement existed in 2022, 2023 or 2024.

Nothing about the house changed between those two answers. The tax result turned entirely on why the name went on title. Families who added a child to avoid probate, lenders who required a name on title for a mortgage, and executors holding property during an estate all sit near this line. Our guide to selling an inherited home in Canada covers the estate side, and the co-borrower and guarantor guide covers why a name added for financing reasons is not the same as a name added as an owner. For UHT purposes, the question to bring to an accountant is narrow: in which capacity, exactly, does each person on title hold the property?

Filing is not paying: the exemption list

An affected owner files even when no tax is owed. The return is where the exemption is claimed, in Parts 4 to 6 of Form UHT-2900. For 2023 and 2024, CRA groups the exemptions from paying as follows.

Type of owner

• A new owner in the calendar year.
• A deceased owner, or a co-owner or personal representative of a deceased owner.

Occupant of the property

• Primary place of residence. Individuals only. The dwelling must be the primary home of the owner or their spouse or common-law partner, or of a child of either who lives there while studying at a designated learning institution.
• Qualifying occupancy. A dwelling unit is occupied by a qualifying occupant for periods totalling at least 180 days in the calendar year. A properly rented home normally fits here, which is why most tenanted properties held by affected owners owed no tax. They still owed the return.

Availability of the property

• Newly constructed property.
• Property not suitable to be lived in year-round, or seasonally inaccessible.
• Property uninhabitable for a period because of a disaster, hazardous conditions, or a renovation.

Location and use

• Vacation property. Individuals only. The property sits in an eligible area of Canada, as defined for this exemption, and the owner or their spouse or common-law partner uses it for at least 28 days in the year. From 2024, two added conditions apply: the exemption is claimed on that year's return for that property, and neither spouse claims the vacation property exemption for any other property that year.
• Employee accommodations, from 2023. Property in an eligible area held to house an individual at a location where their duties require them to be, connected to a business the owner or a related person carries on in Canada.

Two properties in the same file can produce opposite results. A tenanted house is usually exempt under qualifying occupancy. The same owner's empty condo two streets away, held personally by a non-resident, has no occupant-based exemption at all. The exemptions attach property by property and year by year, which is why CRA requires the separate returns.

How the tax is calculated when no exemption applies

Where no exemption covers the ownership, the calculation has three inputs.

1. The value. The default is the property's taxable value: the greater of its assessed value for property tax purposes and its most recent sale price on or before December 31 of the year. An owner can instead elect to use fair market value, but that election requires a written appraisal by an accredited, arm's-length appraiser, filed as part of the return.
2. The rate. 1%.
3. The ownership percentage. The share shown in the land registration system, divided among co-owners where the register shows a group holding a single percentage.

CRA's own published example is a $500,000 property owned 50-50 by two owners: $500,000 times 1% times 50% is $2,500 of tax for that owner for that year. The formula is simple. The assessed-versus-sale-price choice of value is the part to check, because a property bought late in the year at a high price carries the sale price as its value even if the assessment is lower, and a property assessed at a peak value keeps that value even after prices soften. Our property tax guide explains where the assessed figure comes from, and it is the same assessment notice you will use as a record for the UHT file. CRA requires records supporting the return, including the exemption claim, to be kept for six years from the end of the year they relate to, in Canada, in English or French.

The penalty, priced three ways

The failure-to-file penalty under the Act is the greater of two amounts: a flat minimum of $5,000 for an individual or $10,000 for an owner that is not an individual, such as a corporation; or 5% of the tax payable for the year plus 3% of the tax payable for each complete month the return is late. Interest also runs on unpaid tax. The examples below are labelled hypotheticals built on those rules. They show why the minimum, not the percentage, does the damage in most real files.

Example 1: the exempt trustee who never filed

A Canadian parent holds a $650,000 house. An adult child is on title as a bare trustee, so the child is an affected owner. The house is rented all year, every year, so qualifying occupancy makes the tax $0 for 2022, 2023 and 2024. No returns were filed.

Tax owed: $0. Penalty: the percentage half of the formula is 5% and 3% of zero, which is zero, so the $5,000 minimum governs, once per missed return. Three years times $5,000 is $15,000 of penalties on $0 of tax. Had the owner been a corporation, the same three missing returns would start at $10,000 each, or $30,000. The 2022 return could have been filed penalty-free as late as April 30, 2024 under CRA's transitional relief. That door is closed now, and it never applied to the 2023 or 2024 returns in the first place.

Example 2: the vacant condo, one year, six months late

A non-resident individual owns a condo personally. Its taxable value for 2024 is $900,000, using the higher sale price rather than the lower assessment. The condo sits empty all year and no exemption applies.

Tax for 2024: $900,000 times 1% is $9,000, due with the return by April 30, 2025. Suppose the return is filed six complete months late. The percentage penalty is 5% of $9,000 ($450) plus 3% of $9,000 for six months ($1,620), a total of $2,070. The $5,000 minimum is greater, so the penalty is $5,000, on top of the $9,000 tax and interest on the unpaid amount. One empty condo, one year, six months of delay: $14,000 before interest.

Example 3: the December 31 rule, where an exemption stops protecting you

The Act adds a sharper rule for very late returns. If an affected owner has not filed by December 31 of the year after the calendar year in question, the penalty is calculated without the primary place of residence and qualifying occupancy exemptions. In plain terms, a return that is more than eight months late can be penalized as if the tax had been owing all along, even where a tenant or the owner's own occupancy would have exempted it.

Take a $2,000,000 property, fully tenanted, so the tax with the qualifying occupancy exemption is $0. The 2024 return, due April 30, 2025, is filed twelve complete months late, in the spring of 2026, after the December 31, 2025 line has passed. With the occupancy exemption stripped from the penalty calculation, the penalty base is the full 1%: $20,000. The penalty is 5% of $20,000 ($1,000) plus 3% of $20,000 for twelve months ($7,200), for a total of $8,200, charged on a property whose actual tax was zero. Filed before December 31, 2025, the same return would have drawn the $5,000 minimum instead. The calendar, not the property, created the extra $3,200.

What the repeal did not change

Bill C-15 amended the federal Underused Housing Tax Act. It did not amend anything else, and three nearby regimes continue on their own tracks.

• Municipal vacancy taxes. Toronto's vacant home tax, Vancouver's empty homes tax and Ottawa's vacant unit tax are city systems with their own annual declarations, rates and deadlines. CRA said in its 2023 relief announcement that the federal tax is independent of provincial and municipal taxes on vacant or underused housing. An owner can be finished with Ottawa federally and still owe a city declaration every year.
• Provincial taxes. British Columbia's speculation and vacancy tax is a provincial system with its own declaration cycle. It is not the UHT, and the federal repeal does not affect it.
• The sale itself. Selling the property does not erase unfiled years, because the filing duty attached to ownership on December 31 of each year. A buyer, a buyer's lawyer, or CRA can raise the missing returns later. The tax treatment of the sale itself, including the principal residence exemption, is a separate calculation covered in our capital gains guide.

Newcomers and non-resident owners sit at the intersection of several of these systems at once. If you are buying from outside Canada, our newcomer mortgage guide covers the financing side; the UHT history of a property you already own is a filing question for a tax professional, not a lender question.

Audit checklist: find out whether 2022 to 2024 touches you

Work through these questions for each property and each of the three years. A single yes in the first group means the second group needs answers.

1. Did you own residential property in Canada on December 31 of 2022, 2023 or 2024 in any capacity other than as an individual Canadian citizen or permanent resident holding it personally?
2. Is any name on title there as a trustee, including a bare trustee arrangement inside a family, or as a partner of a partnership?
3. Does a corporation hold the property, and can you confirm from the share register that every shareholder is an excluded owner, so the corporation qualifies as a specified Canadian corporation for 2023 and 2024? For 2022, did the corporation file even if it qualified?
4. Are you a non-resident or non-Canadian owner of a house, duplex, triplex or condo unit, however it is used?
5. For each affected year: was a UHT-2900 filed for that property, for that capacity, by April 30 of the following year?
6. If a return was filed, which exemption was claimed in Parts 4 to 6, and do you still hold the records for it: assessment notice, land registration records, trust or partnership agreement, incorporation documents, leases and occupancy records?
7. If no return was filed and one was required, has December 31 of the following year already passed for that year? For all three years, it has, which puts the December 31 penalty rule in play on occupancy-exempt properties and makes prompt filing the priority.
8. Did you file a 2025 return before Bill C-15 passed? Keep it and any CRA letter about its cancellation together. CRA says it will contact early filers by letter; you do not need to withdraw the return yourself.
9. Are the same properties caught by a city vacancy declaration or the BC speculation and vacancy tax? Those calendars are still running.

If questions 5 to 7 surface a gap, file the missing returns before doing anything else, in the order a tax professional advises. Every complete month adds 3% of the penalty base while a return is outstanding, and the returns are per property and per capacity, so a two-property holding structure can have six missing returns, not two.

What this means for owners

The UHT is over as a tax on current ownership. Nobody files for 2025, nobody will file for 2026, and the annual April 30 UHT deadline that owners of companies, trusts and cottages learned to dread is gone. What remains is a three-year lookback with unusually heavy paperwork penalties: $5,000 and $10,000 minimums that attach to the return rather than the tax, and a December 31 rule that removes the two most common exemptions from the penalty math for very late filers. If your name, your corporation's name, or your family's trust arrangement touched residential title at the end of 2022, 2023 or 2024, the cheapest outcome is still a filed return claiming the exemption you were always entitled to. If you are a renter or a landlord with no ownership structure in play, none of this applies to you; the rent increase limits guide and your provincial tenancy rules are the documents that govern your housing costs now.

Frequently asked questions

Is the underused housing tax cancelled in Canada?

For 2025 and later years, yes. Bill C-15 received royal assent on March 26, 2026, amending the Underused Housing Tax Act so that affected owners do not need to file a return or pay the tax for 2025 and subsequent calendar years. The change is not retroactive: filing and payment duties for 2022, 2023 and 2024 still apply in full.

Who had to file a UHT return for 2022 to 2024?

Every owner of residential property in Canada who was not an excluded owner on December 31 of the year. That includes foreign nationals and foreign corporations, Canadian citizens and permanent residents holding property as trustees or partners, and private Canadian corporations that are not specified Canadian corporations. From 2023, specified Canadian corporations, partnerships and trusts became excluded owners. Canadian individuals holding a home personally were excluded owners in all years and filed nothing.

What is the penalty for not filing a UHT return?

The greater of a flat minimum, $5,000 for an individual or $10,000 for a corporation, and 5% of the tax payable plus 3% of the tax payable for each complete month the return is late. The minimum applies even when an exemption reduces the tax to zero. If a return is still unfiled after December 31 of the following year, the penalty is calculated without the primary place of residence and qualifying occupancy exemptions, which can raise it well past the minimum.

I filed a UHT return for 2025 before the law changed. What happens now?

CRA says affected owners who filed a return for the 2025 calendar year before the legislative change will be contacted by letter about the cancellation of their returns. Keep the filed return and the letter together with your other UHT records. CRA's general record rule for UHT is six years from the end of the year the records relate to.

Does renting out my property exempt me from the UHT?

Renting can exempt you from paying, through the qualifying occupancy exemption, if a dwelling unit is occupied by a qualifying occupant for periods totalling at least 180 days in the year. It does not exempt an affected owner from filing. The exemption is claimed on the UHT-2900 return for that property and year, and it is one of the two exemptions removed from the penalty calculation when a return is filed after December 31 of the following year.

Did the repeal cancel Toronto's vacant home tax or BC's speculation tax?

No. Bill C-15 changed the federal Underused Housing Tax Act only. Toronto's vacant home tax, Vancouver's empty homes tax, Ottawa's vacant unit tax and British Columbia's speculation and vacancy tax are municipal and provincial systems with their own declarations and deadlines, and they continue.

My corporation is entirely Canadian-owned. Did it have to file?

For 2023 and 2024, a corporation that meets the specified Canadian corporation test, in simplified terms a Canadian corporation whose shares are all held by excluded owners or other specified Canadian corporations, is an excluded owner and files nothing. For 2022, that same corporation was inside the filing net: it filed a return and claimed the exemption for specified Canadian corporations rather than paying. If the 2022 return was never filed, the transitional relief that waived 2022 penalties for returns filed by April 30, 2024 has expired.

How long do I need to keep UHT records?

CRA states that records supporting a UHT return, including records supporting an exemption, must generally be kept for six years from the end of the year they relate to, kept in Canada in English or French. Assessment notices, purchase agreements, land registration records, partnership or trust agreements, incorporation records, leases and occupancy evidence are the core documents.

Sources

Rules and figures in this guide were taken from the sources below, read in October 2026. Tax law and CRA guidance change; your title documents and share registers govern your file.

• Canada Revenue Agency, What has changed: Bill C-15 received royal assent on March 26, 2026; no return or tax for 2025 and subsequent years; 2022, 2023 and 2024 obligations continue; early 2025 filers to be contacted about cancellation: https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax/what-has-changed.html
• Canada Revenue Agency, Who must file a return and pay the tax: affected and excluded owner rules, one return per property, separate returns per ownership capacity: https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax/who-file-pay.html
• Canada Revenue Agency, Determine if you qualify for an exemption from paying the tax: owner-type, primary residence, qualifying occupancy (180 days), availability, vacation property (28 days, eligible area, added 2024 conditions) and employee accommodation exemptions; an affected owner files even when exempt: https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax/determine-your-responsibilities/determine-qualify-exemption.html
• Canada Revenue Agency, How to complete the return and calculate the tax: Form UHT-2900, taxable value as the greater of assessed value and most recent sale price, the fair market value election and appraisal requirement, the 1% calculation and CRA's $500,000 at 50% example, tax identifier rules, and the six-year record rule: https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax/complete-return.html
• Canada Revenue Agency, Underused Housing Tax Notice UHTN1, Introduction to the Underused Housing Tax, January 2025 version: excluded owner lists for 2022 and for 2023 and subsequent years, including specified Canadian corporations, partnerships and trusts: https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/uhtn1/introduction-underused-housing-tax.html
• Canada Revenue Agency, Questions and answers on the underused housing tax: the parent and adult child joint-title example, where a child holding title in trust for a parent is an affected owner who must file: https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/uhtn15/questions-answers-underused-housing-tax.html
• Canada Revenue Agency news release, October 31, 2023: transitional relief waiving penalties and interest for 2022 returns filed and paid by April 30, 2024, and the statement that the UHT is independent of provincial and municipal vacancy taxes: https://www.canada.ca/en/revenue-agency/news/2023/10/underused-housing-tax-transitional-relief-period-extended-until-april-30-2024.html
• Underused Housing Tax Act failure-to-file penalty, as summarized by D&H Group LLP: the greater of $5,000 (individual) or $10,000 (non-individual), or 5% of tax payable plus 3% per complete month late, with the penalty calculated without certain exemptions when a return is filed after December 31 of the following year: https://www.dhgroup.ca/2023/03/28/the-new-underused-housing-tax-a-new-tax-filing-obligation-for-2022-tax-year/

The author of this guide is not your tax advisor. If the checklist above identifies a missed return, the filing order and the exemption claims for a multi-year, multi-property file are worth professional fees; the penalties in Example 1 started at $15,000 on a property that owed no tax at all.