The Underused Housing Tax Is Cancelled for 2025 — But 2022–2024 Returns Can Still Bite
Llandora·Updated 2026-10-14
⚠️ Disclaimer: For general information only — not tax, financial, legal, or medical advice. Figures may be outdated or incorrect; tax rules change frequently. Verify important decisions with the CRA/IRS or a qualified professional (for health topics, a licensed healthcare provider). You use this information at your own risk.
The short answer
The federal Underused Housing Tax (UHT) is gone for the 2025 calendar year and beyond. Bill C-15 received Royal Assent on March 26, 2026, eliminating both the 1% tax and the filing requirement for 2025 and later years. That is the good news, and it is where most summaries stop. The part that still costs people money: nothing was cancelled retroactively. If you were required to file a UHT return for 2022, 2023, or 2024 and did not, the obligation — and the penalties — are fully alive.
What the UHT was
The UHT imposed an annual 1% tax on the value of vacant or underused residential property in Canada, effective January 1, 2022. It mainly targeted non-resident, non-Canadian owners, but its filing net caught many Canadians too: anyone who was an affected owner (not an excluded owner) had to file a return for each property, even if an exemption meant no tax was payable. Corporations, trusts, and partnerships holding residential property were the classic traps — generally Canadian individuals owning directly were excluded owners with no filing duty.
What Bill C-15 actually did
No tax, no return for 2025+. New provisions state that no tax is payable and no return is required for residential property for the 2025 and subsequent calendar years.
2022–2024 untouched. The budget materials are explicit: "all UHT requirements continue to apply in respect of the 2022 to 2024 calendar years," including penalties and interest for late or missing filings.
The Act lives until 2035. The Underused Housing Tax Act is formally repealed effective January 1, 2035 — a drafting device to preserve the CRA's authority to assess the 2022–2024 years, not a signal the tax could return.
Penalties remain steep. The minimum penalty for a missed or late return is $1,000 for individuals and $2,000 for corporations, for each year a filing was required.
The non-obvious hook for newcomers
Newcomers with property are the highest-risk group for exactly the years that survive:
Arrived 2022–2024 and bought through a corporation or with family co-ownership? Ownership structure, not citizenship alone, determined filing duty. A newcomer couple holding a condo through a holding structure could easily have been affected owners for 2023 or 2024 without knowing the UHT existed.
Non-resident owners. If you owned Canadian residential property while non-resident in any of those years, you were squarely in the target population.
Bare trusts. The CRA's shifting guidance on bare trusts created years of confusion; if a bare trust arrangement touched your property in 2022–2024, that year's position needs a deliberate review, not an assumption.
Each property, each owner, each year. The return is per property per owner per year. Three years of missed filings on one property can mean three separate penalties.
The CRA waived nearly $2.5 billion in UHT interest and penalties for the chaotic 2022 launch year — but that relief belonged to that year's administrative mess, not to a general amnesty. Do not assume leniency for 2023 or 2024.
What to do now
Reconstruct 2022–2024, year by year. For each residential property you owned (directly or through an entity) on December 31 of each year, determine: were you an excluded owner or an affected owner that year?
Check whether Form UHT-2900 was filed for each property-year where you were an affected owner.
Fix gaps promptly. Voluntary correction before the CRA comes calling is always cheaper than assessed penalties plus interest.
Stop calendaring UHT for 2025+. Remove the recurring reminder — but keep records of your 2022–2024 analysis in case the CRA asks.
Frequently asked questions
I only heard about the UHT when it was cancelled. Am I safe?
No — cancellation is prospective only. Your exposure depends on your 2022–2024 facts: ownership structure and residency each year. "I didn't know" is not a filing exemption.
I owned my home personally and lived in it. Did I need to file?
Generally, a Canadian individual who directly owns and lives in their home is an excluded owner with no filing obligation. The risk cases are entity ownership, co-ownership structures, trusts, and non-resident owners.
What if I missed a 2022 return — was there an extension?
The CRA gave multiple extensions for 2022 (filing without penalty was extended to April 30, 2024, aligning with the 2023 deadline), and penalty relief was broad that year. But an unfiled 2022 return is still an unfiled return — review it rather than assuming you are covered.
Do I need to file anything for 2025?
No. For the 2025 calendar year and later, no UHT is payable and no UHT return is required. The CRA does not expect filings for those years.
Investment Executive, Liberal tax promise tracker: Bill C-15 edition (CPA Canada confirmation, 2022–2024 still applies): https://www.investmentexecutive.com/industry-news/liberal-tax-promise-tracker-bill-c-15-edition/
Maroof HS, Proposed End of UHT for 2025 (no retroactive relief, year-by-year review): https://www.maroofhs.com/post/bill-c-15-proposed-end-of-uht-returns-for-tax-years-2025-and-onwards/
CRA, Who must file a return and pay the tax — Underused Housing Tax: https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax/who-file-pay.html
This article is general information about Canadian tax rules, not tax advice. UHT filing history is fact-specific — if you owned residential property through any entity or while non-resident in 2022–2024, have a licensed Canadian tax professional review those years.
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