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2025+ UHT Ended — 2022–2024 Obligations Remain

Underused Housing Tax (UHT) Rules & Historical Filing Guide 2026

Important 2026 update: the federal UHT does not apply and no UHT return is required for 2025 or later years, while outstanding 2022–2024 obligations can still require filing, tax payment or exemption claims.

1. The Most Important 2026 UHT Update: No UHT for 2025 and Later Years

The original version of this page was materially outdated for 2026. The federal Underused Housing Tax (UHT) no longer applies to residential properties for the 2025 calendar year or any subsequent calendar year. Budget 2025 Implementation Act, No. 1 received Royal Assent on March 26, 2026 and amended the Underused Housing Tax Act so that no UHT is payable for 2025 and later years and no UHT return is required for 2025 and later years. The legislation also provides for repeal of the Underused Housing Tax Act and Regulations effective January 1, 2035. This does not erase earlier obligations. CRA expressly states that UHT filing and payment requirements still apply to the 2022, 2023 and 2024 calendar years. Accordingly, a person researching UHT in 2026 should not be instructed to file a new UHT return for the 2025 calendar year or to calculate a 2026 1% UHT liability. The relevant issue in 2026 is whether there are outstanding 2022–2024 UHT returns, tax amounts, penalties, elections or exemption documentation that still need to be resolved.

Key Rule Benchmark
2025 and Later: No UHT is payable.
Key Rule Benchmark
2025 and Later: No UHT return is required.
Key Rule Benchmark
Royal Assent: Budget 2025 Implementation Act, No. 1 received Royal Assent on March 26, 2026.
Key Rule Benchmark
Historical Obligations: UHT still applies to the 2022, 2023 and 2024 calendar years.
Key Rule Benchmark
Historical Rate: For applicable years, the UHT was generally 1% of taxable value multiplied by the applicable ownership percentage.
Key Rule Benchmark
2035 Repeal: The legislation provides for repeal of the UHT Act and Regulations effective January 1, 2035.

2. Historical UHT: Who Was an Affected or Excluded Owner?

For the 2022–2024 calendar years, UHT distinguished between excluded owners and affected owners. Generally, Canadian citizens and permanent residents who owned residential property in their own capacity were excluded owners and did not have to file a UHT return or pay the tax. However, ownership capacity mattered: an individual could be an affected owner in a partnership or trust capacity even if the person was a Canadian citizen or permanent resident. Affected owners included foreign nationals, certain corporations, and certain other owners who were not excluded under the statute. If an affected owner owned residential property on December 31 of a relevant historical year, the person generally had to file a separate UHT return for each residential property and pay UHT unless an exemption applied. The 2023 and later rules also changed the treatment of specified Canadian partnerships, specified Canadian trusts and specified Canadian corporations. The specified Canadian partnership and trust exemptions were not a blanket current exemption for all years; they were amended for 2023 onward and the special exemption category for specified Canadian corporations was changed by the 2024 amendments. The calendar year matters.

Historical Ownership SituationGeneral UHT Treatment for 2022–2024Return Required?
Canadian citizen or permanent resident owning directly in an individual capacityGenerally an excluded ownerNo
Foreign national owning directlyGenerally an affected ownerYes, unless an applicable statutory exemption or other rule applied
Certain foreign corporation owning residential propertyGenerally affected ownerYes, unless an applicable exemption applied
Citizen/PR acting as partner or trusteeCould be affected depending on ownership capacity and yearPotentially yes
Multiple ownership capacitiesEach applicable capacity could be treated separatelySeparate return can be required for each affected capacity
2025 or later ownershipUHT no longer appliesNo UHT return required

3. Historical 1% UHT Calculation and Taxable Value

For an applicable 2022–2024 calendar year, the general UHT calculation was 1% multiplied by the property's taxable value and then multiplied by the owner's applicable ownership percentage. The taxable value under the general rule was the greater of the residential property's assessed value established by the applicable property-tax authority and the property's most recent sale price on or before December 31 of the calendar year. An individual could elect to use fair market value under the applicable UHT election rules instead of the general taxable-value calculation. Ownership percentage and ownership in multiple capacities can also affect the calculation. For example, if a historical affected owner had 100% ownership and the taxable value for the relevant calendar year was $1,000,000, the gross UHT before exemptions would be $10,000. This example applies only to a historical year for which UHT was in force; it must not be presented as a 2025 or 2026 tax liability.

Historical UHT Calculation ElementRuleIllustrative Example
UHT rate1%1% of taxable value
General taxable valueGreater of assessed value and most recent sale price on or before December 31$1,000,000 taxable value
Ownership percentageApplied to the UHT amount for the relevant ownership interest100% ownership = full calculated amount
Gross historical UHT1% × taxable value × ownership percentage$10,000 for 100% ownership of $1M taxable value
2025 and laterNo UHT payableNo 1% UHT calculation

4. Historical Exemptions: Primary Residence, Qualifying Occupancy and Uninhabitable Property

For the years in which UHT applied, an affected owner could avoid the 1% tax by satisfying an applicable exemption. Exemptions did not generally transform an affected owner into an excluded owner: the owner could still have to file the annual UHT return to claim the exemption. The primary-place-of-residence exemption was available only to individual affected owners in qualifying circumstances. A dwelling unit in the residential property had to be the primary place of residence of the owner or the owner's spouse/common-law partner, or in specified circumstances the primary residence of a qualifying child attending an authorized program at a designated learning institution. The qualifying-occupancy exemption was based on at least 180 days of qualifying occupancy during the calendar year. The 180 days could be made up of one or more qualifying occupancy periods, each generally at least one month. A qualifying occupant could include an individual occupying under a written agreement or certain individual owners or family members under the statutory rules. It is therefore inaccurate to reduce the exemption to '180 days under an arm's-length lease' in every case. Uninhabitable-property exemptions also had specific statutory conditions and could apply to property made uninhabitable by a disaster, hazardous condition or renovation. The relevant exemption had different day-count and factual requirements, so a generic '120 days of renovation' rule is not sufficient.

Historical ExemptionCore RequirementFiling Treatment
Primary Place of ResidenceQualifying dwelling is the primary residence of the owner/spouse/common-law partner or qualifying child in the circumstances prescribedAffected owner generally still had to file to claim the exemption
Qualifying OccupancyAt least 180 days in qualifying occupancy periods during the calendar yearAffected owner generally still had to file to claim the exemption
Uninhabitable PropertyProperty meets the statutory disaster, hazardous-condition or renovation exemption requirementsAffected owner generally still had to file to claim the exemption
Vacation PropertySpecified location and occupancy/use conditions must be met under the rules for the applicable yearAffected owner generally still had to file to claim the exemption
2025 and laterNo UHT appliesNo UHT return required

5. Historical Work-Permit Holders, Foreign Owners and Newcomers

For the historical UHT years 2022–2024, a foreign national who owned a Canadian residential property could be an affected owner even if the person had a Canadian work permit or was living in the property. Having a work permit did not by itself convert the person into an excluded owner. A work-permit holder could potentially qualify for an exemption for a historical year depending on the statutory exemption and the property's actual use. For example, if an affected individual used the property as a qualifying primary residence, the primary-residence exemption could be relevant. A qualifying-occupancy exemption could also apply where the statutory occupancy requirements were satisfied. The important distinction is between an owner's status and an exemption from tax. A foreign work permit holder could be an affected owner who had a zero-tax liability because an exemption applied. In that historical situation, filing could still be mandatory. For 2025 and subsequent years, none of these historical UHT filing/exemption calculations are necessary because UHT no longer applies.

Key Rule Benchmark
Historical Work Permit Holder: Could be an affected owner for 2022–2024.
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Work Permit Does Not Equal Excluded Owner: Immigration status alone did not make a foreign owner an excluded owner.
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Historical Primary Residence: Could potentially exempt an affected individual from UHT if statutory requirements were met.
Key Rule Benchmark
Historical Qualifying Occupancy: Could potentially exempt an affected owner where the 180-day and occupant requirements were satisfied.
Key Rule Benchmark
Historical Filing Duty: An affected owner generally had to file even if an exemption meant no tax was payable.
Key Rule Benchmark
2025+: No UHT return or UHT tax liability.

6. Historical Filing Deadlines, Penalties and UHT-2900

For a calendar year in which UHT applied, the return and any tax owing were generally due April 30 of the following calendar year. The historical UHT minimum late-filing penalty is $1,000 for an individual affected owner and $2,000 for a corporation, and interest can apply to unpaid tax. The 2024 amendments changed several UHT definitions and penalty rules, while Budget 2025 subsequently ended UHT for 2025 and later. The penalty figures should therefore be understood as historical filing consequences for the 2022–2024 returns that remain outstanding in 2026. Form UHT-2900 is the Underused Housing Tax Return and Election Form. It remains relevant for filing historical returns. CRA now permits online filing through its UHT online form and, for eligible individuals and Canadian corporations, secure CRA portals. The old statement that UHT could simply be filed through NETFILE was not accurate. Because the 2024 return was due April 30, 2025, an affected owner who still has an outstanding 2024 return in August 2026 should address it promptly. The 2025 return should not be filed because the statutory requirement was removed for 2025 and later years.

Actionable Living & Housing Checklist

  • Identify whether an outstanding 2022, 2023 or 2024 UHT return remains.
  • Check whether you were an affected owner for the applicable historical calendar year.
  • Calculate any historical UHT and ownership percentage correctly.
  • Claim the correct exemption on UHT-2900 where applicable.
  • Submit historical UHT returns using CRA's current UHT filing channels.
  • Pay outstanding historical UHT and applicable interest/penalties where required.
  • Do not file a UHT return for 2025 or later years.

7. 2026 UHT Compliance Checklist: What Property Owners Should Do Now

The appropriate 2026 action depends on the calendar year being reviewed. For 2025 and later, no UHT return is required and no UHT is payable. There is therefore no 2026 annual UHT filing cycle for a newly completed 2025 calendar year. For 2022–2024, however, affected owners may still have unresolved filing obligations. A property owner should determine the ownership status for each historical December 31 date, review the applicable exemption rules for that particular year and check CRA records for filed returns, assessments, penalties and balances. Historical records should be retained. CRA guidance says affected owners generally need to keep UHT records for six years from the end of the calendar year to which they relate. Evidence can include property assessment information, sale records, ownership documents, leases, occupancy records, immigration documents, residence evidence, corporate/partnership/trust records and exemption evidence.

Actionable Living & Housing Checklist

  • 2026: Do not calculate a new UHT liability for 2025 or later.
  • 2022–2024: Check whether you were an affected owner for each relevant year.
  • Review every residential property separately.
  • Check each ownership capacity, including partnership or trust interests where relevant.
  • Locate prior UHT-2900 filings, notices of assessment and CRA correspondence.
  • Resolve outstanding historical returns, tax, penalties and interest.
  • Keep historical UHT records for the CRA retention period.

Official Government & Tribunal References

Frequently Asked Questions (6 Verified Answers)

No. Budget 2025 Implementation Act, No. 1 received Royal Assent on March 26, 2026 and ended UHT for the 2025 calendar year and all subsequent calendar years. No UHT is payable and no UHT return is required for 2025 or later years.

Yes. CRA expressly states that the UHT filing and payment requirements still apply to the 2022, 2023 and 2024 calendar years. An affected owner with an outstanding historical return may still need to file UHT-2900 and pay any applicable tax, penalties and interest.

Generally, an individual who was a Canadian citizen or permanent resident and owned the residential property directly in an individual capacity was an excluded owner and did not have to file or pay UHT for the historical years. However, ownership in another capacity, such as as a trustee or partner, could change the result. The exact calendar year and ownership capacity must be checked.

Potentially. A foreign work permit holder could be an affected owner for 2022–2024, but could qualify for a historical exemption such as the primary-place-of-residence or qualifying-occupancy exemption if all statutory conditions were met. Being exempt from the tax did not necessarily eliminate the filing obligation for an affected owner.

For an applicable historical year, the general calculation was 1% multiplied by the property's taxable value and then by the applicable ownership percentage. Under the general rule, taxable value was the greater of the property's assessed value established for property-tax purposes and its most recent sale price on or before December 31. An applicable election could allow an individual to use fair market value instead.

No. That is outdated information for 2026. UHT returns are no longer required for 2025 and subsequent calendar years. Historical returns for 2022, 2023 and 2024 can still be required where the owner was an affected owner, and the normal historical deadline was April 30 of the following calendar year.

UHT Key Metrics

  • UHT for 2025+
    No Tax and No Return Required
  • Historical UHT Rate1% of Taxable Value
  • Minimum Late-Filing Penalty
    $1,000 Individual / $2,000 Corporation
  • Historical Return Deadline
    April 30 Following the Calendar Year