Underused Housing Tax (UHT) Canada 2026 — Federal Repeal, What Still Applies
Quick Answer
The Underused Housing Tax Canada 2026 status in one paragraph: the federal UHT — a 1% annual tax on the value of vacant or underused Canadian residential property owned by certain non-excluded owners — was repealed by Bill C-15, which received royal assent on March 26, 2026. The repeal applies for the 2025 calendar year and all later years. Owners do not file UHT-2900 returns for 2025 onward. Returns and penalties for the 2022, 2023, and 2024 calendar years still apply: late or unfiled returns for those years can still be assessed, the minimum penalty is $5,000 per owner for individuals and $10,000 per owner for non-individuals, and CRA’s voluntary disclosures program remains available. Most Canadian citizens and permanent residents owning property directly were already exempt as “excluded owners” since the 2023 amendments. Foreign nationals, non-Canadian corporations, and several other categories were still affected by the federal UHT through 2024 and remain subject to assessment for those prior years. Provincial vacancy taxes — BC’s Speculation and Vacancy Tax (3% for foreign owners in 2026), Ontario’s 25% Non-Resident Speculation Tax — and municipal vacant-home taxes in Vancouver, Toronto, Hamilton, Ottawa, and several other cities are unaffected by the federal repeal and continue to apply.
What changed: Bill C-15 repealed the federal UHT
The Underused Housing Tax Act came into force on January 1, 2022 as part of the federal government’s foreign-buyer housing measures. It imposed a 1% annual tax on the taxable value of underused or vacant residential property held by “affected owners” — broadly, persons who were not Canadian citizens or permanent residents, certain Canadian corporations, partnerships, trusts, and a narrowing set of other categories.
The administrative burden of the UHT-2900 return was always disproportionate to the revenue raised. The 2023 amendments to the Underused Housing Tax Act exempted most Canadian-controlled private corporations, specified Canadian partnerships, and specified Canadian trusts from filing — moving them from “affected owners” to “excluded owners” — but left the legal architecture in place.
Bill C-15, tabled in late 2025 and given royal assent on March 26, 2026, repeals the Underused Housing Tax Act effective for the 2025 calendar year and all later years. No UHT-2900 return is required for 2025. No 1% tax is owed for 2025. The repeal is not retroactive: assessment of unfiled or late-filed returns for 2022, 2023, and 2024 continues, including late-filing penalties and the 1% tax for those years where applicable.
What still applies: 2022–2024 federal exposure
If an owner had a UHT filing obligation for the 2022, 2023, or 2024 calendar year and did not file, CRA can still assess the return. The relevant filing deadline was April 30 of the following year (April 30, 2023 for the 2022 calendar year, and so on, with the 2022 deadline extended to April 30, 2024 by the original transitional relief and a further series of administrative extensions).
The penalty for failure to file a UHT-2900 return on time is the greater of (a) $5,000 for individuals or $10,000 for non-individuals (corporations, partnerships, trusts), and (b) 5% of the UHT for the year plus 3% of the UHT multiplied by the number of months the return is late. Where the value of the property is over $1 million and several years are late, penalties can climb into the tens of thousands of dollars per owner before any actual UHT is even owed.
Three common 2022–2024 fact patterns we are still resolving for clients in 2026:
A non-Canadian individual (typically a U.S. or U.K. resident) owning a Canadian residential property — a cottage, a condo for an adult child at university, a vacation property — who never filed UHT-2900 returns for 2022 or 2023. The exposure is the late-filing penalty ($5,000 minimum per year per owner) plus any actual 1% UHT on the property’s taxable value if no exemption applied. Voluntary disclosure under VDP can wipe penalties if accepted.
A Canadian-incorporated holding company that owned residential property in 2022 and 2023 before the 2023 amendments moved most CCPCs to excluded-owner status. If returns were not filed, the corporation faces a $10,000 per year per property exposure. Voluntary disclosure is the standard fix.
A bare trust holding residential property for a parent or child where the bare trustee did not file. Bare trusts were “affected owners” for UHT purposes in 2022 and 2023; the 2023 amendments narrowed this for specified Canadian trusts. The intersection with the bare trust T3 reporting rules is awkward but not impossible.
What still applies: ongoing federal — none, except prior years
There is no ongoing federal UHT for 2025 or later years. CRA will continue to administer assessments, refunds, and penalty remissions for prior years until the statute of limitations runs (generally three years from the original assessment date, longer for unfiled returns).
What still applies: provincial vacancy taxes
The federal repeal does not affect provincial vacancy or speculation taxes, which are administered by provinces under their own statutes. The principal ones for Ontario and BC-based owners in 2026:
British Columbia Speculation and Vacancy Tax (SVT). Applies in designated areas of BC including Metro Vancouver, the Capital Regional District, Kelowna, Nanaimo, and several other regions. The 2026 rate is 3% for foreign owners and satellite families (up from 2% for the 2025 tax year), 0.5% for Canadian citizens and permanent residents who are not satellite families. The annual declaration is mandatory for all owners in designated areas, even if no tax is owed; missing the declaration triggers assessment at the maximum rate.
Ontario Non-Resident Speculation Tax (NRST). A 25% one-time tax on the purchase or acquisition of an interest in residential property in Ontario by foreign nationals, foreign corporations, and taxable trustees. Not annual. Triggered at acquisition. Limited rebates available for foreign-national post-graduates and protected persons who become Canadian citizens or permanent residents within four years.
Toronto Vacant Home Tax. 3% of the current value assessment for property that is vacant for more than six months in a calendar year, increased from 1% for the 2024 tax year onward. Annual declaration required by all Toronto residential property owners — even owner-occupied principal residences must file a declaration confirming occupancy. Penalty for non-declaration is automatic assessment at the vacant rate.
Vancouver Empty Homes Tax. 3% of the assessed value for property unoccupied for more than six months in the reference year. Declaration is mandatory. The Vancouver Empty Homes Tax is layered on top of the BC SVT for properties in Vancouver.
Ottawa Vacant Unit Tax. 1% of the assessed value for properties vacant more than 184 days in the calendar year. Annual declaration required.
Hamilton Vacant Home Tax. Introduced in 2025 at 1% of the assessed value. Annual declaration required.
These provincial and municipal taxes are independent of the federal UHT and were not affected by Bill C-15. An owner who was exempt from the federal UHT under the 2023 amendments may still owe provincial or municipal vacancy tax. An owner who was subject to federal UHT through 2024 is generally also subject to one or more of these taxes depending on the property’s location.
Foreign-owner exposure in 2026
Foreign nationals and non-Canadian corporations owning Canadian residential property are the highest-exposure population in 2026 because they face the intersection of:
- Late-filing penalties for 2022, 2023, and 2024 federal UHT returns if not filed on time.
- Ongoing provincial vacancy taxes (BC SVT, Ontario NRST at acquisition, municipal vacant-home taxes).
- Income tax filing obligations (T1 NR for non-residents earning Canadian rental income, T2062 clearance certificates on disposition).
- T1135 reporting for the Canadian property if the foreign owner has Canadian residency for the year (different population, but overlapping at the immigration-status edge).
The 2026 work for this population is to clean up the 2022–2024 federal UHT exposure under VDP where possible, confirm provincial and municipal compliance, and document the residency status for income tax purposes going forward.
Common misconceptions cleared in 2026
Several client-side misconceptions about the repeal:
“Bill C-15 wiped out all my UHT exposure including the 2022 returns I never filed.” No. The repeal is prospective. 2022–2024 returns and penalties remain assessable.
“I am a Canadian citizen so I never had to file.” For 2023 and 2024, most Canadian-citizen direct owners were excluded. For 2022, the rules were broader and some Canadian-citizen owners with corporate, trust, or partnership ownership structures were affected. Worth confirming on a property-by-property basis.
“The repeal means provincial vacancy taxes are also gone.” No. Provincial and municipal taxes are separate. BC SVT and Toronto Vacant Home Tax continue in 2026 and beyond.
“My UHT-2900 from 2022 was filed late but no penalty was assessed, so I’m fine.” CRA can still assess late-filing penalties going back to the filing deadline. The statutory penalty applies whether or not CRA has issued a notice.
“I sold the property in 2024 so I’m out.” If returns for 2022, 2023, or 2024 were required while you owned it, the obligation does not transfer to the new owner. Your personal liability remains.
Frequently asked questions
Is the federal UHT really gone for 2025? Yes. Bill C-15 repealed the Underused Housing Tax Act effective for the 2025 calendar year and all subsequent years. No UHT-2900 return is required for 2025 onward. The repeal received royal assent on March 26, 2026.
Do I still need to file for 2022, 2023, or 2024 if I missed the deadlines? Yes if you were an affected owner for those years. The repeal is not retroactive. CRA can still assess late-filing penalties ($5,000 minimum for individuals, $10,000 for non-individuals) plus any 1% UHT. VDP can wipe penalties if the return is filed before CRA contacts you.
I am a foreign national who owns a Toronto condo. What is my 2026 exposure? Federal UHT for 2025 onward: nil (repealed). Federal UHT for 2022, 2023, 2024: potential late-filing penalties if returns were not filed. Toronto Vacant Home Tax: 3% annually if vacant >6 months, declaration mandatory regardless. Ontario NRST: 25% only if you acquired the property after 2022 (one-time at acquisition). Confirm rental income reporting on Section 216 elections.
Will BC’s Speculation and Vacancy Tax still apply? Yes. The federal repeal does not affect provincial taxes. BC SVT is 3% for foreign owners in 2026 (up from 2%) and 0.5% for Canadian citizens and permanent residents in designated areas. The annual declaration is mandatory.
What if I just want to forget about it? Risky. CRA’s UHT data pool from 2022–2024 will continue to drive compliance reviews for several years. Foreign-owner data flows automatically to CRA from provincial land-title records and BC SVT administration. A late filing under VDP costs you the return preparation; an audit-driven assessment with penalties and interest can cost an order of magnitude more.
Does the federal UHT repeal affect the Bare Trust T3 reporting? No — they are separate regimes. Bare Trust T3 + Schedule 15 reporting is administered under the Income Tax Act and continues for the 2024 tax year onward (subject to any future relief). UHT was administered under the Underused Housing Tax Act and has been repealed.
Case study: Mississauga family with U.K.-resident son and a vacant condo, 2026
A Mississauga family owned a downtown Toronto condo purchased in 2021 for $620,000 as a future residence for their son. The son moved to the U.K. in 2022 to take an academic position. The condo was vacant for most of 2022, 2023, and 2024 — used occasionally by the family for weekend stays and stored furniture between tenancies.
Ownership structure: 50% the father (Canadian citizen, Mississauga resident), 50% the son (Canadian citizen, U.K. resident for tax purposes from 2022 onward). No UHT-2900 returns were filed for 2022, 2023, or 2024. The Toronto Vacant Home Tax declaration was filed correctly each year showing >50% occupancy (the family’s weekend stays qualified).
Exposure analysis under the 2023-amended UHT rules and the 2026 repeal:
The father, as a Canadian citizen owning the property directly, was an “excluded owner” for the 2023 and 2024 years following the 2023 amendments. No UHT return required for him for 2023 or 2024.
For 2022, the broader rules required the father to file a UHT-2900 reporting his 50% interest even as an excluded owner — but the 2023 amendments removed this obligation retroactively for most Canadian citizens. Father’s 2022 exposure: nil under the amended rules.
The son, as a Canadian citizen non-resident for tax purposes, was an “affected owner” for the 2022 and 2023 years for his 50% interest. He should have filed UHT-2900 returns for both years. The condo’s 2022 taxable value (CRA accepts the most recent assessed value or fair market value) was $625,000; the 2023 value was $650,000.
Son’s UHT-2900 2022 exposure: 1% of $312,500 (50% interest) = $3,125 — but the principal residence and “vacation property” exemptions may apply (the latter requires the property to be in an eligible non-urban area, which downtown Toronto is not). If no exemption applies, son owes $3,125 UHT for 2022 plus a late-filing penalty of the greater of $5,000 or [5% of $3,125 + 3%/month late] = $5,000.
For 2023, the son was eligible for a new “specified Canadian individual” exemption introduced in the 2023 amendments. If properly claimed, the 1% UHT for 2023 is reduced or eliminated. But the return still had to be filed. Late-filing penalty: $5,000 minimum.
For 2024, same as 2023 — return required, exemption likely available, penalty $5,000 if not filed.
For 2025 onward: nil under Bill C-15 repeal.
Total exposure for son if no remediation: approximately $18,125 ($3,125 UHT 2022 + $5,000 penalty 2022 + $5,000 penalty 2023 + $5,000 penalty 2024). Plus interest at CRA’s prescribed rate for the period since each deadline.
Remediation under VDP: file the three returns with full disclosure before CRA contacts the family. If VDP application is accepted, all penalties and most interest are waived. Net cost to family: approximately $2,400 in professional fees plus the $3,125 UHT for 2022 (if no exemption applies) — total under $6,000 vs $18,000+ if CRA finds them first. The Toronto Vacant Home Tax position was clean and required no additional work.
Engagement timing: 2026 is the last reasonable window for VDP relief on 2022 returns before CRA’s data-matching from provincial sources catches up to the file.
Where to start
If you owned Canadian residential property between 2022 and 2024 and any of these apply — non-Canadian-citizen or non-permanent-resident ownership, ownership through a corporation or trust, bare trust arrangements, or any uncertainty about whether returns were required — we run a 2022–2024 UHT exposure review. The output is a clear schedule of which returns were required, what penalties apply, whether VDP is available, and what the all-in cost looks like compared to letting CRA find the file.
For 2025 and 2026 forward, the federal UHT layer is gone. The remaining work is mapping the property against the provincial and municipal vacancy taxes that apply to its location.
Free 30-min UHT review with a CPA, CA, LPA — fixed-fee quote in 48 hours on the historical filings and VDP application.
For related practical-tax topics, see the Bare Trust T3 filing guide for owners with similar fact patterns, and the CRA Voluntary Disclosures Program guide for the relief mechanism we use.
This article is general information about the Underused Housing Tax federal repeal under Bill C-15 (March 26, 2026), the residual 2022–2024 federal exposure, and the provincial and municipal vacancy taxes in 2026. It is not legal, tax, or accounting advice for your specific situation. Tax rules and CRA administrative positions change. Engage Insight Accounting CPA Professional Corporation or another licensed advisor before acting. Insight Accounting CPA Professional Corporation is licensed as a Licensed Public Accountant under the Public Accounting Act, 2004 in Ontario.
