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The Underused Housing Tax (UHT)

The government of Canada has implemented a new tax, the Underused Housing Tax. The tax is an annual 1% tax on the ownership of vacant or underused housing in Canada, that took effect on January 1, 2022. This letter is being sent to all clients of our firm that may potentially be impacted by the new tax. Below is a summary of some of the important points regarding the tax.

Who must file a return and pay the tax?

Affected owners of residential property include, but are not limited to:

  • A Canadian corporation whose shares are not listed on a Canadian stock exchange

  • A corporation that is incorporated outside of Canada

  • A Canadian corporation without share capital

  • An individual who is not a Canadian citizen or permanent resident

  • An individual who is a Canadian citizen or permanent resident and who owns a residential property as a trustee of a trust

  • Any person that owns residential property as a partner of a partnership


Affected owners who are individuals are subject to a minimum penalty of $5,000. Affected owners that are corporations are subject to a minimum penalty of $10,000.


Affected owners listed above must file the return, but will be exempt from the tax if they meet any of the below exemptions:

See Appendix 1 for examples of the exemptions.

Filing Deadline

The return must be filed by April 30th of the following calendar year. For example, the 2022 filing will be due April 30, 2023.

Filing the Return

The return can be filed electronically or by mail. Attached is a copy of the return that can be filed by mail or below is a link to the CRA website that the return can be filed at:

If you would like Holmes Riseley LLP to file the return on your behalf, we would be more then happy to assist. Regular billing rates for the work would apply and we would require the following information:

  • Certificate of incorporation, if applicable

  • Details of each residential property including:

  • Physical/legal address

  • Property ID used in the land registration system, if applicable

  • Property tax invoices for 2022

  • Type of residential property (ie. Detached house, duplex, condo, etc.)

  • Year that property was acquired

  • Percentage of ownership; if less than 100% please provide the other owners and their percentage of ownership

  • The properties most recent sale price before December 31, 2022

  • Do you meet any of the exemptions listed above? If so, please provide details to which exemption/ situation applies. Additionally:

  • If the property is rented, please provide:

  • The type of occupant (unrelated individual, related individual, spouse or common-law partner)

  • Was the rent considered fair value?

  • The total number of days during the calendar year that are included in a qualifying occupancy period (ie. How long was it rented for?)

  • If the property was uninhabitable due to disaster or hazardous conditions or under renovations, please provide the dates that the property became uninhabitable and inhabitable again (if applicable).

  • If you fall outside of the exemptions and wish to use the fair market value of the property, rather then the assessed value, please provide a written appraisal prepared by an accredited real estate appraiser operating at arm’s length from you with an effective date for fair market value that is between January 1st of the calendar year and April 30th of the following year.

Please feel free to reach out to the firm if you have any questions.

Appendix 1

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