By OptiVal Editorial Desk

The Underused Housing Tax Is Dead: What Canadian Owners Still Owe for 2022 to 2024

The federal underused housing tax (UHT) is gone. Parliament scrapped it as part of the 2025 federal budget, and for the 2025 calendar year onward there is nothing to file and nothing to pay. If your accountant had a recurring April 30 UHT return on the calendar for a corporate-owned property, that task comes off the list.

But do not close the file just yet. The repeal is not retroactive. If you owned residential property in Canada as an “affected owner” during 2022, 2023 or 2024 and never filed, CRA can still come after those years, with minimum penalties of $1,000 for individuals and $2,000 for corporations per missed return. Plenty of Canadian owners still have this exposure and do not know it.

What the underused housing tax was, and what killed it

The UHT took effect January 1, 2022 as a 1% annual federal tax on vacant or underused housing in Canada. The government pitched it as a tax on foreign owners, but the filing net was drawn far wider. Canadian private corporations, bare trusts, partnerships, and trustees that owned residential property could all be “affected owners,” forced to file an annual UHT-2900 return for each property even when an exemption brought the tax payable to zero. The structure punished paperwork, not foreign ownership.

The 2025 federal budget changed that. On March 26, 2026, Bill C-15 (the Budget 2025 Implementation Act, No. 1) received Royal Assent, and with it the UHT was eliminated for the 2025 calendar year and every year after. No return. No tax. Nothing to file for 2025, even if your corporation would previously have been an affected owner.

The catch: 2022, 2023 and 2024 still count

The repeal does not reach back. If you were an affected owner for any of the 2022, 2023 or 2024 calendar years, you still owe CRA those returns. Missed filings from those years can still draw penalties, and CRA’s records of property ownership do not disappear just because the tax was repealed.

The rules also shifted between those years, so do not assume your situation was the same each year:

• 2022: the widest net. Private corporations, trustees (including bare trust arrangements), partnerships and non-resident individuals were generally all affected owners with a filing obligation.
• 2023 and 2024: narrowed. An amending bill passed in 2024 broadened the “excluded owner” definition, so that most Canadian-owned corporations, partnerships and trusts were no longer caught starting with the 2023 year.

If you filed for 2022 but skipped 2023 on the assumption nothing was owed, that assumption may have been right, but it is worth confirming rather than guessing. If you never filed for 2022, you should check that year specifically, because the penalties for that year have been sitting in the background for a while now.

Who had to file: the affected-owner test

The test starts with who was on title on December 31 of the calendar year. Everyone who was not an “excluded owner” was an “affected owner” and had to file. Excluded owners generally included Canadian citizens and permanent residents holding property in their own name, listed Canadian corporations, registered charities, and governments. From 2023 onward, most Canadian-owned private corporations, partnerships and trusts joined that list.

A few filing details that still matter for anyone cleaning up old years:

• One UHT-2900 return per property per affected owner. If two affected owners shared one property, each filed a separate return.
• The return was due April 30 of the following year. The 2024 return, for example, was due April 30, 2025.
• The tax was 1% of the taxable value, which was the greater of the property’s assessed value and its most recent sale price on or before December 31. Many owners owed no tax at all after exemptions, and still had to file.
• Corporations filing a return needed a UHT program account added to their business number, separate from their GST/HST, payroll and corporate tax accounts.

The penalties for missed returns

This is where the repeal stings. The minimum penalty for failing to file a UHT return is $1,000 for individuals and $2,000 for corporations, even if no tax was owing (amendments in 2024 reduced these from the original $5,000 and $10,000 minimums, with the reduction applying retroactively to the 2022 year). A holding company that never filed for 2022, 2023 and 2024 could theoretically face $6,000 in penalties on paperwork for a tax that no longer exists. If you suspect you are in that position, the CRA’s voluntary disclosure program is worth understanding before you file, because coming forward on your own changes the penalty picture considerably.

Short-term rental hosts should pay attention

If you ran a short-term rental inside a corporation or a bare trust, you were exactly the kind of owner the filing net caught. The CRA’s broader short-term rental rules, including the expense restrictions for non-compliant rentals, are a separate headache, and we covered the 2026 short-term rental tax rules in detail. A rental property in a corporate structure often triggered both sets of obligations.

Clean it up in three steps

1. Reconstruct the ownership history. For each residential property, identify who was on title on December 31 of 2022, 2023 and 2024, and whether that owner qualified as excluded for that year. Bare trust arrangements deserve special attention, because a bare trustee who never filed could be the surprise exposure. See our bare trust filing guide for how those structures are treated.

2. File what is missing. Affected owners for 2022 through 2024 still owe those returns. Get the UHT program account set up on your business number first, then file one UHT-2900 per property per year owed.

3. Keep the proof. Exemption claims, tenancy records and ownership documents should be kept with your tax records. If CRA questions a filing position from 2022, you will need to produce the evidence.

Not sure where you stand? We help owner-managed businesses sort out missed filings and corporate tax cleanups. Book a free consultation and we will review your exposure for 2022 through 2024. Cleanup work starts at $45/hr, and ongoing bookkeeping starts at $199/month, all in CAD before HST.

Led by qualified professionals with more than 75 years of combined experience, PwC-trained, who have worked at world-leading multinationals in CFO-level positions. See our services and pricing for the full picture.