Underused Housing Tax (UHT): No 2025 Return, 2022-2024 Still Due

The Underused Housing Tax (UHT) is a federal tax that took effect on 1 January 2022 on vacant and underused residential property in Canada. It has been eliminated. There is no 2025 UHT return, no UHT payable for 2025, and no 30 April 2026 deadline.

On 26 March 2026 the Budget 2025 Implementation Act, No. 1 (Bill C-15, S.C. 2026, c. 3) received royal assent. Its section 167 added section 1.1 to the Underused Housing Tax Act:

No tax is payable under subsection 6(3) by a person in respect of a residential property for 2025 and subsequent calendar years.

Its section 168 added section 6.1:

Despite sections 7 and 10, a person is not required to file a return for a residential property for 2025 and subsequent calendar years.

The CRA puts the same thing in one sentence on Notice UHTN16: “Affected owners do not need to file a return or pay the underused housing tax (UHT) for 2025 and subsequent calendar years.”

But 2022, 2023 and 2024 still count

The CRA’s note continues: “the requirement to file a UHT return and pay the tax still applies to the 2022, 2023, and 2024 calendar years.” The Act itself is not repealed until 1 January 2035 (S.C. 2026, c. 3, s. 169).

Each of those three returns was due on 30 April of the following year, and all three dates have passed. The minimum penalty for not filing is $1,000 for an individual and $2,000 for a corporation — payable even when no tax was owing. That back-year exposure is the reason this page still exists, and everything below is written for 2022, 2023 and 2024 only.

The federal tax is not the only vacancy tax. BC’s speculation and vacancy tax, Vancouver’s Empty Homes Tax and Toronto’s Vacant Home Tax are separate, provincial and municipal, and still apply; the vacancy tax calculator estimates all three.

Who Had to File, and for Which Years

The UHT was a 1% annual tax, but the obligation to file was always much broader than the obligation to pay — and it narrowed sharply after the first year.

Excluded owners never had to file or pay. UHTN16: “Excluded owners are persons that are excluded from the UHT. These persons do not have to file an annual UHT return or pay the UHT.” From the 2023 calendar year the definition was widened considerably — Bill C-59 (S.C. 2024, c. 17, s. 136) replaced it, and subsection 136(6) deems the replacement to have come into force on 1 January 2023. As it now reads in section 2 of the Act, excluded owners include:

• An individual who is a Canadian citizen or permanent resident and owns the property in their own right
• A trustee of a specified Canadian trust — new from 2023
• A partner of a specified Canadian partnership — new from 2023
• A specified Canadian corporation — new from 2023
• A trustee of a mutual fund trust, real estate investment trust or SIFT trust
• A Canadian corporation whose shares are listed on a designated Canadian stock exchange
• A registered charity, cooperative housing corporation, hospital authority, municipality, public college, school authority, university, para-municipal organization or Indigenous governing body, and the federal or a provincial Crown
• A Canadian citizen or permanent resident who owns the property as the personal representative of a deceased individual

Affected owners — everyone who is not on that list — had to file one return per property for the year, whether or not any tax was payable. For 2023 and 2024 that is essentially foreign nationals and foreign corporations; Canadian owners holding through a trust that is not a specified Canadian trust (nor a mutual fund, REIT or SIFT trust); partners of a partnership that is not a specified Canadian partnership; and Canadian corporations that are not specified Canadian corporations — broadly, corporations with foreign ownership or control of 10% or more.

The trap was real — but only for 2022

For the 2022 calendar year, many ordinary Canadian owners were caught purely by how they held title, and the CRA assessed penalties for not filing.

Example: A Canadian couple owns their cottage through a family trust for estate-planning purposes. For 2022 the trustees had to file a UHT return for the trust’s interest in the cottage, even though no tax was due. For 2023 and 2024 the trust is a specified Canadian trust, so they are excluded owners and file nothing.

Example: A Canadian-controlled private corporation with no foreign shareholders owns a residential rental property. It had to file for 2022. From 2023 it is a specified Canadian corporation — an excluded owner — and files nothing.

The distinction matters more than it sounds. An exemption is claimed on a return that still has to be filed; an exclusion means there is no return at all, and therefore no failure-to-file penalty.

How the 1% Tax Was Calculated

Under section 6(3) of the Act the tax is 1% × the taxable value × your ownership percentage.

Taxable value is the greater of:

• the value established for the property by the authority that assesses real property for property-tax purposes, and
• the property’s most recent sale price on or before 31 December of the calendar year.

An owner could instead elect to use fair market value, determined in a manner satisfactory to the Minister, at any time from 1 January of the year to 30 April of the following year (s. 6(4)).

Ownership percentage is your share of the property — it is not a proration for how many months you held it. Owning on 31 December is what triggers the return. A first-time acquisition is dealt with by an exemption instead: if you became an owner during the year and had not owned the property in any of the previous nine calendar years, no tax is payable for that year (s. 6(7)(g)).

Exemptions — for owners who did have to file

An affected owner filed a return and claimed the exemption on it. The main ones:

Occupancy

• A dwelling unit on the property is the primary place of residence of the owner, their spouse or common-law partner, or their (or their spouse’s) child who occupies it for authorized study at a designated learning institution (s. 6(8)). No minimum number of days applies to this exemption — the 180-day test belongs to the next one.
• The property is occupied for 180 days or more in the year under qualifying occupancy periods (s. 6(9)). A qualifying occupancy period is a period of at least one month during which the dwelling unit is continuously occupied by an arm’s-length individual under a written agreement; a non-arm’s-length individual under a written agreement at no less than fair rent; the owner or their spouse while in Canada on an authorized work permit; or a spouse, common-law partner, parent or child of the owner who is a Canadian citizen or permanent resident (s. 6(1)).

Location or use

• Vacation property: the property is in a prescribed area — outside any census metropolitan area and outside any census agglomeration of 30,000 or more, or inside one of those but outside a population centre — and is used as a place of residence or lodging by the owner or their spouse or common-law partner for at least 28 days in the calendar year (s. 6(7)(m); Underused Housing Tax Regulations, s. 2(2) and 2(3)). Only one property per couple per year can be designated this way.
• The property is not suitable for year-round use as a place of residence, or is seasonally inaccessible because public access is not maintained year-round (s. 6(7)(c), (d)).
• The property is uninhabitable for at least 60 consecutive days because of a disaster or hazardous condition beyond the owner’s control (s. 6(7)(e)), or for at least 120 consecutive days because of a renovation carried on without unreasonable delay — and only if the renovation exemption was not used for that property in any of the nine prior years (s. 6(7)(f)).
• Construction was not substantially completed before April of the year, or was substantially completed in January, February or March, the property was offered for sale to the public that year and was never occupied (s. 6(7)(k), (l)).
• The owner died during the year or the prior year, or is the personal representative of an owner who did, or held at least a 25% interest alongside an owner who did (s. 6(7)(h), (i), (j)).

Seasonal-use nuance: a cottage closed up from October to April cannot reach 180 days of qualifying occupancy. For Canadian cottage owners who were affected owners, the 28-day vacation-property exemption was the one that did the work.

Filing a Back Year

Form UHT-2900 (Underused Housing Tax Return and Election Form) is filed per property, per calendar year, and now only for 2022, 2023 and 2024. The deadlines — 30 April 2023, 2024 and 2025 respectively — have all passed.

The form requires:

• Property identification (address, roll number, legal description)
• Property type (detached house, condo, duplex, etc.)
• Your ownership percentage
• The property’s taxable value and how it was determined (assessed value, sale price, or an elected fair market value)
• The exemption you are claiming (if any)
• Calculation of any UHT payable

It is filed electronically through the CRA’s My Account, My Business Account or Represent a Client portal, or on paper by mail.

Penalties for Non-Filing

The minimum penalty for failing to file a UHT return by the deadline is:

• $1,000 for individuals
• $2,000 for corporations

Those are the reduced minimums: UHTN16’s “Reduced minimum failure to file penalty amounts” lowered them from $5,000 and $10,000, back to the 2022 calendar year. The penalty is the greater of that minimum and an amount-based formula: 5% of the UHT payable plus 3% of the UHT payable for each complete calendar month the return is late. Even if no UHT was payable, the minimum penalty applies for failure to file — this is the part that catches people out.

The CRA began issuing non-filing notices and assessing penalties in 2024. If you were an affected owner and did not file for 2022, 2023 or 2024, you may have penalty exposure across multiple years, and the elimination of the tax for 2025 does not touch it.

Practical Checklist

Nothing to do for 2025 or later. No return, no payment, no deadline.

For 2022, 2023 and 2024, in that order:

1. For each year, work out whether you were an excluded owner on 31 December. Remember that the list widened on 1 January 2023, so the answer can be different for 2022 than for 2023 and 2024.
2. If you were a citizen or permanent resident who owned the property in your own right, you were an excluded owner in every one of those years and never had a filing obligation.
3. If you held through a corporation, partnership or trust, check 2022 separately — that is the year the specified-Canadian exclusions did not yet exist.
4. For any year you were an affected owner, identify every residential property you held an interest in on 31 December of that year.
5. For each one, determine whether an exemption applied, and confirm you can document the specific condition (the 180 days of qualifying occupancy, the 28 days of vacation use, and so on).
6. File the outstanding Form UHT-2900 for that property and year. The return is still required even where an exemption reduces the tax to nil.
7. If you have missed filings, speak to a Canadian tax professional with UHT experience before filing — the Voluntary Disclosures Program may reduce penalties, and it is only available before the CRA contacts you.

Sources

• CRA — Underused Housing Tax Notice UHTN16, including the update on filing requirements
• Underused Housing Tax Act (S.C. 2022, c. 5, s. 10), consolidated
• Underused Housing Tax Regulations (S.C. 2022, c. 19, s. 116)
• Budget 2025 Implementation Act, No. 1 (S.C. 2026, c. 3), ss. 167–169
• Fall Economic Statement Implementation Act, 2023 (S.C. 2024, c. 17), s. 136
• CRA — Form UHT-2900, Underused Housing Tax Return and Election Form