Even if your property is fully exempt from paying the 1% tax, if you are classified as an **"Affected Owner"** (non-resident non-citizens, trustees, or private corporations), you **must file Form UHT-2900 annually**. Failure to file results in an automatic minimum penalty of **$5,000 CAD** for individuals.
What is the UHT?
The Underused Housing Tax (UHT) is a federal tax of **1% annually** assessed on the value of vacant or underused residential property in Canada owned directly or indirectly by foreign nationals.
- Affected Owner: Any owner who is not an "Excluded Owner." Excluded owners (who have no filing obligations) include Canadian citizens and permanent residents.
- Annual Deadline: The filing deadline for Form UHT-2900 is **April 30** of the following calendar year.
- Tax Assessment: The 1% tax is based on either the property's assessed value (local municipal tax value) or the most recent sale price, whichever is higher.
Common UHT Exemptions
Most affected owners qualify for one of the following exemptions to reduce their tax liability to $0, although they must still file the return:
| Exemption Category | Requirements | Key Document Required |
|---|---|---|
| Primary Place of Residence | Occupied as a primary residence by the owner, their spouse, or child for at least 180 days in the year. | Utility bills, school registrations. |
| Qualifying Occupancy | Occupied by an arm's-length tenant under a written lease agreement for at least 180 days. | Lease agreements, rent receipts. |
| Vacation Property Exclusion | Residential property located in an eligible rural/vacation postal code, and used by the owner or spouse for at least 28 days. | CRA Geographic Designation Lookup Tool confirmation. |
| Newly Constructed | The property was not completed before April of the calendar year. | Occupancy permit. |
CRA Non-Filing Penalties
CRA enforces severe penalties for missing the April 30 filing deadline, even if no tax is owed:
- Minimum Individuals Penalty: An automatic **$5,000 CAD** penalty per property for failing to submit Form UHT-2900 on time.
- Minimum Corporations Penalty: An automatic **$10,000 CAD** penalty for affected corporate entities.
- No Expiry of Assessment: CRA can audit and assess UHT returns with no time limit (statute of limitations does not apply if a return was never filed).
This guide compiles official CRA guidelines and tax definitions for the UHT sourced directly from:
• Canada Revenue Agency (CRA) Underused Housing Tax portal: canada.ca/cra-uht
• CRA UHT-2900 Filing Form and Instructions: canada.ca/form-uht-2900