Update 2025-11-04: The 2025 Federal Budget proposes to eliminate the Underused Housing Tax as of the 2025 calendar year. This change is not yet law and still requires legislation.
In 2024, Bill C-69 amended several important changes to the UHT — many retroactive to 2022 or 2023:
The Underused Housing Tax (UHT) is an annual federal tax on the ownership of vacant or underused housing in Canada. Originally intended to target non-resident, non-Canadian owners, the UHT also affected many Canadian citizens, residents, and corporations and required them to file a 6-page return for each of the residential properties as of 2022.
In 2024, Bill C-69 introduced several major amendments to the UHT, including broader excluded-owner rules so that most Canadian corporations, partnerships, and trusts no longer need to file; a new exemption for residential properties used to house employees or contractors such as farm or seasonal workers; and a vacation-property exemption allowing only one claim per couple per year. Many were retroactive to 2022 and 2023.
As of 2024, penalties for late filing were reduced to $1,000 for individuals and $2,000 for corporations (previously $5000 and $10,000). These apply retroactively to 2022.
If you answer all three questions with a yes as of December 31 of a calendar year then you must file an Underused Housing Tax return to CRA:
We have created a flow chart to help you with this.
Affected owners must submit a 6-page form for each of their residential properties, even if they don't owe the tax. You must have a Social Insurance Number (SIN), Individual Tax Number (ITN), or a Canadian business number (BN) with an Underused Housing Tax (RU) program account identifier code before you submit. The UHT-2900 return can be filed by:
Should you have any questions or concerns please feel free to contact our BR Advisors or CRA.
For the purposes of the UHT, this definition is found in your province’s partnership act.
Generally, “Partnership is the relation which subsists between persons carrying on a business in common, with a view of profit” with or without a written agreement. More details can be found in Income Tax Folio S4-F16-C1, What is a Partnership?
What is a specified Canadian partnership?
A partnership who by the end of the calendar year or later are any of the following:
CRA: Exemptions for Specified Canadian Partnerships, Trusts and Corporations.
This depends on a few factors so you may need to speak to an accountant or lawyer. More clarification can be found in CRA’s FAQs.
What is a specified Canadian Trust?
A trust whose beneficiaries that have a beneficial interest in a residential property are all, on December 31, excluded owners or specified Canadian corporations.
CRA: Exemptions for Specified Canadian Partnerships, Trusts and Corporations.
What is a specified Canadian corporation?
A corporation that is federally or provincially registered on December 31st of the calendar year where:
CRA: Exemptions for Specified Canadian Partnerships, Trusts and Corporations.
What about Farmers who house temporary foreign workers?
CRA has shared that this housing is typically provided in the form of:
Should you have any questions or concerns about these, feel free to contact CRA or our business advisors.
What about principal residences?
What is a residential property?
Examples of residential property include:
Examples of non-residential property include:
(1%)(Fair Market Value* or Taxable value)(ownership %)
*There is an election that allows the use of the fair market value of the residential property
By April 30 of the following year.
There is transitional relief for the first applicable tax year, 2022, where the return is due by April 30, 2023. Although the deadline for filing the UHT return and making payments is still April 30, 2023, no penalties or interest will be applied for UHT returns and payments that the CRA receives before November 1, 2023.