Mistakes, Disputes and Official Sources
Underused Housing Tax in 2026: is it gone, and what do owners still owe?
The status of Canada's Underused Housing Tax after Budget 2025, who still has to file for 2022 to 2024, how the 1% tax worked, and what buyers and sellers should check.
The federal Underused Housing Tax (UHT), a 1% annual tax on the value of residential property owned mainly by non-resident non-Canadians, no longer applies from the 2025 calendar year. Budget 2025 proposed eliminating it from 2025, and the implementing legislation (S.C. 2026, c. 3) received Royal Assent on 26 March 2026, so no UHT is payable and no UHT return is required for 2025 and later years. The obligations for 2022, 2023 and 2024 remain: owners who had to file for those years and did not can still face the tax, penalties and interest. Provincial and municipal vacancy taxes, such as BC's speculation and vacancy tax and Toronto's or Vancouver's vacant home taxes, are separate and are not affected.
This guide is part of Mistakes, Disputes and Official Sources. For the rules on buying, see foreign buyer ban and non-resident taxes. Check the CRA's UHT pages for the latest administrative guidance.
Timeline
| Date | Event |
|---|---|
| 1 January 2022 | Underused Housing Tax Act in force; first taxation year 2022 |
| 2023 | Filing deadlines for 2022 extended; many Canadian owners caught by filing rules |
| 20 June 2024 | Amendments (Bill C-69) become law: more owners become "excluded owners" from 2023, minimum penalties reduced, some exemptions added |
| 4 November 2025 | Budget 2025 proposes eliminating the UHT from the 2025 calendar year |
| 26 March 2026 | Implementing legislation receives Royal Assent; formal repeal of the Act set for a later date (Budget 2025 proposed 1 January 2035) |
How the tax worked for 2022 to 2024
Who had to file. "Affected owners" of residential property in Canada on 31 December. Individuals who were Canadian citizens or permanent residents were generally excluded owners and never had to file. Non-resident non-Canadian individuals had to file every year. For 2022, many Canadian corporations, trustees and partners also had to file even if no tax was due; from 2023, most of them became excluded owners.
Tax. 1% of the taxable value, which was the greater of the property's assessed value and its most recent sale price, unless the owner elected to use fair market value with an appraisal.
Exemptions. An affected owner could claim an exemption, for example if the property was the primary place of residence of the owner, spouse or child, if it was occupied by qualifying tenants for at least 180 days in the year, or if it was a vacation property in an eligible area used personally for a minimum period. Claiming an exemption still required filing a return.
Deadline. The return for each year was due 30 April of the following year.
Illustrative example. A non-resident owner of a Vancouver condo assessed at $800,000 who left it empty in 2024 owed 1% x $800,000 = $8,000 for 2024, and had to file by 30 April 2025. For 2025 and later, nothing is due under the UHT, though BC's speculation and vacancy tax and Vancouver's empty homes tax may still apply.
What this means if you are buying or selling now
Sellers who are or were affected owners. If you should have filed for 2022, 2023 or 2024 and did not, deal with it before or at the time of sale. The CRA can still assess tax, penalties and interest for those years. Penalties for failing to file were reduced by the 2024 amendments, but they still apply. A voluntary disclosure may be possible; get professional advice.
Buyers. UHT was a tax on the owner, not a lien on title in the way property tax arrears are. It does not normally pass to a buyer. Your lawyer still checks for taxes registered against the property.
Canadian corporations, trusts and partnerships. If you owned residential property through one of these on 31 December 2022, check whether a 2022 return was required. The rules for 2022 were broader than for later years.
Vacancy taxes that still apply
| Tax | Level | Who it affects |
|---|---|---|
| Speculation and vacancy tax | BC provincial, designated areas | All owners must declare annually; higher rate for foreign owners and satellite families |
| Empty Homes Tax | City of Vancouver | Owners of vacant properties; annual declaration |
| Vacant Home Tax | City of Toronto | Owners of vacant residential properties; annual declaration |
| Other municipal vacancy taxes | Some Ontario municipalities | Check your municipality |
These require declarations even when no tax is owed, and penalties apply for missing them. Sellers should file declarations for the years they owned the property.
Checklist
- Were you a non-resident, non-Canadian owner of residential property on 31 December 2022, 2023 or 2024?
- Did you own residential property through a corporation, trust or partnership on 31 December 2022?
- If yes, were returns filed by the deadlines, with any exemptions claimed?
- For 2025 and later, are provincial or municipal vacancy declarations up to date?
- If you sell, does your lawyer or accountant know about any outstanding returns?
Frequently asked questions
Do I have to file a UHT return for 2025?
No. Under the Budget 2025 measure enacted in March 2026, no UHT return is required and no tax is payable for 2025 and later calendar years. Check the CRA's UHT pages for confirmation.
Can the CRA still collect UHT for 2023?
Yes. Obligations for 2022 to 2024, including penalties and interest, continue to apply.
I am a Canadian citizen. Did I ever have to file?
Individual Canadian citizens and permanent residents were generally excluded owners, unless they held the property as a trustee or partner, which mattered mainly for 2022.
Does ending the UHT end Toronto's or Vancouver's vacancy tax?
No. Those are municipal taxes with their own rules and declarations.
Sources
- Canada Revenue Agency: Underused Housing Tax, what has changed — filing rules and amendments
- Budget 2025: tax measures — elimination of the UHT from 2025
- Justice Laws Website — Underused Housing Tax Act and amendments
- Government of British Columbia — speculation and vacancy tax
- City of Toronto — Vacant Home Tax
- City of Vancouver — Empty Homes Tax
