The Underused Housing Tax (UHT) is a federal tax introduced in 2022, aimed at increasing housing availability in Canada. It’s a 1% annual tax on the value of residential properties in Canada that are vacant or underused. While it mainly applies to non-Canadian owners, some Canadian property owners may also be required to file a return, even if no tax is owed.
The UHT was put in place to address housing shortages by discouraging speculation and long-term vacancy of homes.
Who needs to file or pay the UHT
Many people assume this tax only affects foreign owners, but the rules are broader. You may need to file a UHT return if you’re not an individual Canadian citizen or permanent resident, even if you don’t owe any tax.
You may also need to file if you own property through a:
● Corporation
● Partnership
● Trust or nominee arrangement (for example, if the property is held in someone else’s name on your behalf)
There are several exemptions available, such as if the property is your primary residence, occupied by tenants, or used seasonally. However, even if you qualify for one of these exemptions, you still must file a return to report that.
What happens if you don’t file?
Failing to file your UHT return on time can lead to serious penalties, even if you owe no tax. The minimum fine is $5,000 for individuals and $10,000 for corporations, plus interest charges. Filing late or skipping it entirely can become costly very quickly.
Let us help you stay compliant
At Budget Accounting Ltd., we help clients navigate the UHT filing process from start to finish. Whether you’re unsure if you need to file, or just want peace of mind that it’s done correctly, we’re here to support you.
Call us at (905) 508-5007 or visit www.budgetaccounting.ca for more information.

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