--- title: "Underused Housing Tax: Eliminated for 2025, Past Years Stand" url: https://www.everstonecpa.com/blog/underused-housing-tax-canada-corporations description: "The Underused Housing Tax is eliminated from 2025, but 2022 to 2024 obligations stand, including the filing rule that caught corporations. Check yours." type: guide updated: 2026-10-12 summary: "The Underused Housing Tax was an annual federal 1% tax on vacant or underused Canadian housing, aimed mainly at foreign owners, and it has been eliminated from the 2025 calendar year : no tax and no return for 2025 onward. Obligations for 2022, 2023 and 2024 still stand, including the filing trap that caught some Canadian corporations, partners and trustees who owed nothing." faq_count: 6 publisher: EverStone CPA Inc., a Chartered Professional Accountant firm registered with CPA British Columbia and CPA Alberta service_area: British Columbia, Alberta, Ontario and Manitoba language: en-CA contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online --- [Home](https://www.everstonecpa.com/) [Blog](https://www.everstonecpa.com/blog) Underused Housing Tax: why corporations get caught by the filing rule Tax # Underused Housing Tax: *why corporations get caught* By EverStone CPA · Updated September 2026 · 9 min read **Quick answer:** The Underused Housing Tax was an annual federal 1% tax on vacant or underused Canadian housing, aimed mainly at foreign owners, and it has been [eliminated from the 2025 calendar year](https://www.everstonecpa.com/tax-update/underused-housing-tax-eliminated): no tax and no return for 2025 onward. Obligations for 2022, 2023 and 2024 still stand, including the filing trap that caught some Canadian corporations, partners and trustees who owed nothing. Filing and paying are two separate questions. **Rather have a CPA handle this?** A CPA at EverStone replies with a straight answer and a fixed fee for your situation. [Get My Fixed Quote →](https://www.everstonecpa.com/book-online) ## Key takeaways - The UHT is an annual 1% federal tax on vacant or underused residential property, in effect since January 1, 2022. - Filing and paying are separate questions, an owner can be exempt from the tax and still be required to file a return. - Corporations, partners and trustees were caught because the original rules made them affected owners even for ordinary Canadian housing. - Amendments in Bill C-69 received Royal Assent on June 20, 2024 and, from the 2023 calendar year, moved most Canadian owners into the excluded category. - Because the rule has been amended more than once, the filing position has to be confirmed for the specific calendar year being filed. The Underused Housing Tax was aimed at foreign owners of empty Canadian homes. But its filing rules swept in many Canadian owners who owed nothing — most often small corporations. ## What the Underused Housing Tax actually is The Underused Housing Tax (UHT) is an annual 1% federal tax on vacant or underused housing in Canada, in effect since January 1, 2022. The CRA says it applies mainly to foreign national owners, but also to certain Canadian partners, trustees and corporations. The tax aimed at one group; the reporting net caught a larger one. **Missed an Underused Housing Tax return for an earlier year?** We file what is outstanding and deal with the CRA on penalties, at a fee quoted in writing. [Get a quote](https://www.everstonecpa.com/book-online?service=catch-up#enquiry-form). [Get My Fixed Quote](https://www.everstonecpa.com/book-online?service=catch-up#enquiry-form) ## Filing and paying are separate questions This is the mechanism that trips people up. The UHT applies two independent tests: - **Are you an affected owner?** If yes, you file a return for the property. Every affected owner files. - **Do you qualify for an exemption from the tax?** If yes, you file the return and pay nothing. Being exempt from the tax does not exempt you from the return. Ownership is tested on December 31 and returns are filed per property, so an affected owner of three properties files three, and affected co-owners file separately. Only an **excluded owner**, generally a Canadian owner of residential property, escapes both. ## Why corporations were the ones caught A Canadian citizen or permanent resident owning a house personally has almost always been an excluded owner. A corporation was not, nor was a partner of a partnership or a trustee of a trust. Hence the typical surprised filer: - A small operating or [holding company](https://www.everstonecpa.com/blog/holding-company-canada-when-it-makes-sense) that happens to own a house, duplex or condo. - A family that put a rental property inside a corporation for liability or estate reasons. - Co-owners in circumstances that might be characterized as a partnership rather than simple co-ownership. - Anyone holding registered title for somebody else — the classic [bare trust](https://www.everstonecpa.com/blog/bare-trust-reporting-canada) arrangement. **Ownership capacity multiplies returns.** The CRA has confirmed that a person owning a property in more than one capacity is treated as a separate person for each capacity, where one of those is a partner of a partnership or a trustee of a trust. One property can therefore generate more than one return. Not sure how this applies to you? Every corporation is different. Send an enquiry for a straight answer and a fixed quote. [Send an Enquiry →](https://www.everstonecpa.com/book-online) [See fixed fees](https://www.everstonecpa.com/pricing) ## What changed, and why the year matters more than the rule On June 20, 2024, Bill C-69 amendments to the *Underused Housing Tax Act* received Royal Assent. Per the CRA, from the 2023 calendar year most Canadian owners of residential property need not file or pay. The changes: - More Canadian owners were brought inside the definition of excluded owner — the change that removed most accidental filers. - An additional exemption category was added for employee accommodations. - Vacation properties were added to the exemptions to which an adjusted penalty calculation may apply. - Reaching back to 2022, the original minimum penalty was reduced and certain residential condominium units were removed from the definition of residential property. So a corporation’s position can differ between 2022 and later years with no change to the property. Reconstruct each year separately. ## Deadlines and penalties, with a caution The due date to file, make elections and pay for a calendar year is April 30 of the following calendar year. The CRA currently publishes minimum late-filing penalties of $1,000 for an individual affected owner and $2,000 for a corporation, with a further adjustment where an affected owner claiming certain exemptions has not filed by December 31 of the following year. Treat those figures as a reason to file on time rather than as settled numbers — the minimum has already been reduced once by amendment. ## Provincial and municipal vacancy taxes are separate The CRA is explicit that provincial and municipal vacancy taxes are different taxes, implemented by different governments, and that exemption from one does not exempt an owner from another. In British Columbia a property can sit inside more than one vacancy regime at once. ## What to actually do - List every residential property held, and identify the capacity in which it is held on December 31 of each year in question. - Test excluded-owner status for each capacity and year against the rules as they stood then. - If an affected-owner conclusion appears, determine whether an exemption applies, and file regardless. - Keep the analysis inside your [record retention system](https://www.everstonecpa.com/blog/underused-housing-tax-canada-corporations) rather than in somebody’s memory. If a return should have been filed and was not, that is a correction question. The [Voluntary Disclosures Program](https://www.everstonecpa.com/blog/voluntary-disclosures-program-canada-fixing-past-returns) exists for taxpayers who want to fix the record first, and timing matters most. ## The bottom line The UHT is a small tax with a large compliance footprint: it split filing from paying and defined filers by legal form. If residential property sits in a corporation or trust you control, ask whether you must file for this year, in this capacity. Rental property held through a company belongs on the [real estate investor](https://www.everstonecpa.com/accountant-for-real-estate-investors) side of your file. Sources - [Canada Revenue Agency — Underused Housing Tax (UHT)](https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax.html) - [Canada Revenue Agency — UHT: What has changed](https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax/what-has-changed.html) - [Canada Revenue Agency — UHT: Who must file a return and pay the tax](https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax/who-file-pay.html) - [Canada Revenue Agency — UHT: When to file the return and pay the tax](https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax/when-file.html) This article is general information, current as of July 2026. It is not tax, legal or accounting advice and creates no client relationship. Rules change and situations differ, so [speak with a CPA](https://www.everstonecpa.com/book-online) before acting on it. About this article **EverStone CPA** Prepared and reviewed by a CPA at EverStone CPA, serving businesses in BC, Alberta, Ontario and Manitoba. [About the firm →](https://www.everstonecpa.com/about) · [Send an enquiry →](https://www.everstonecpa.com/book-online) ### Keep reading [Bare trust reporting in Canada →](https://www.everstonecpa.com/blog/bare-trust-reporting-canada) [Expanded T3 trust reporting →](https://www.everstonecpa.com/blog/trust-reporting-rules-canada-t3) [CPA for real estate investors →](https://www.everstonecpa.com/accountant-for-real-estate-investors) [Underused Housing Tax eliminated — The Underused Housing Tax is gone, and so is the return →](https://www.everstonecpa.com/tax-update/underused-housing-tax-eliminated)[How to File a T2 Return: The Six Steps, in Order →](https://www.everstonecpa.com/blog/how-to-file-t2-return-canada) FAQ ## Frequently asked questions **What is the Underused Housing Tax?** The Underused Housing Tax (UHT) is an annual 1% federal tax on vacant or underused housing in Canada, in effect since January 1, 2022, aimed mainly at foreign national owners but also reaching certain Canadian partners, trustees and corporations. **Why would a corporation file if it owes no tax?** Because filing and paying are separate tests. An affected owner, meaning one who is not excluded, files for each residential property held on December 31, even when exempt from the tax. That gap caught Canadian corporations. **Did the rules change after the UHT was introduced?** Yes. Bill C-69 amendments received Royal Assent on June 20, 2024, and from the 2023 calendar year most Canadian owners of residential property need not file or pay. Some changes reach back to 2022, so check each year. **What counts as residential property for UHT purposes?** Generally a detached house or similar building containing a maximum of three dwelling units, or a semi-detached house, rowhouse unit or condominium, including the related land. Certain residential condominium units have since been removed from the definition. **What is the UHT filing deadline?** The return, any elections and payment for a calendar year are due April 30 of the following year. If that falls on a weekend or CRA-recognized public holiday, the return is on time if received or postmarked by the next business day. **Is the UHT the same as a provincial or municipal vacancy tax?** No. Provincial and municipal vacancy taxes are separate taxes from separate governments, and an exemption from one does not carry to another. ## Not sure whether your company has a UHT filing obligation? Tell us which properties the company owned and for which years. A CPA replies by email within one business day with what is due and a fixed fee. [Get My Fixed Quote](https://www.everstonecpa.com/book-online)[Book a Paid Advice Call](https://www.everstonecpa.com/advice-call) ## Have a question about this? Ask free through [the quick-question form](https://www.everstonecpa.com/quick-question); a CPA replies within one business day. Need more? A 45-minute **Advice Call** is $225 plus GST, credited to your first invoice if you become a client within 60 days. Want us to take it on? [Send an enquiry](https://www.everstonecpa.com/book-online). [Ask a Free Question](https://www.everstonecpa.com/quick-question) [Book a Paid Advice Call](https://www.everstonecpa.com/advice-call) Email info@everstonecpa.com ★★★★★ “Personal. Professional. Responsive. 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