Do my clients still have to file Underused Housing Tax returns now that the UHT is gone?
No Underused Housing Tax return or tax is due for 2025 or any later year. The Budget 2025 Implementation Act, No. 1 received royal assent on March 26, 2026. Returns for 2022, 2023 and 2024 are still required from affected owners, and a late one costs at least $1,000 for an individual or $2,000 for any other owner.
Which UHT years still need a return, as of October 2026
Affected owners don't file a return or pay the UHT for 2025 and later calendar years, but the filing and payment rules still apply to 2022, 2023 and 2024 canada.ca. Each year's return and payment was due April 30 of the following year
canada.ca.
| Calendar year | Return required? | Original due date | Who had to file |
|---|---|---|---|
| 2022 | Yes | April 30, 2023 (penalty and interest relief to April 30, 2024) | Every affected owner, including Canadian corporations, partners and trustees claiming an exemption |
| 2023 | Yes | April 30, 2024 | Affected owners only; most Canadian owners became excluded owners |
| 2024 | Yes | April 30, 2025 | Affected owners only |
| 2025 | No | None | Nobody |
| 2026 and later | No | None | Nobody |
The 2022 relief is over. The CRA waived penalties and interest on 2022 returns only if the return was filed and the tax paid by April 30, 2024 canada.ca. From 2023 onward, more Canadian owners fell into the excluded owner definition, so the majority of Canadian owners don't file at all
canada.ca.
What the Budget 2025 Implementation Act changed
Budget 2025 proposed ending the UHT as of the 2025 calendar year, and said penalties and interest for 2022 to 2024 would keep applying budget.canada.ca. The bill carrying it, Budget 2025 Implementation Act, No. 1, received royal assent on March 26, 2026 as S.C. 2026, c. 3
parl.ca. The same Act repealed the digital services tax back to its June 20, 2024 start.
Two new sections of the Underused Housing Tax Act do the work. Section 1.1 says no tax is payable under subsection 6(3) for 2025 and later calendar years, and section 6.1 says no return is required for those years despite sections 7 and 10 laws-lois.justice.gc.ca.
The Act itself is still on the books. Subsection 169(1) of S.C. 2026, c. 3 repeals it, but Justice Laws lists that repeal as not yet in force in the consolidation current to September 21, 2026 laws-lois.justice.gc.ca. Until then, the CRA keeps its assessment and collection powers for 2022 to 2024.
Provincial and municipal vacancy taxes are separate taxes, and the federal change doesn't touch them canada.ca. A client with a Vancouver or Toronto property still deals with those on their own rules.
Worked example: a 2024 return filed in October 2026
Your client is a foreign national who solely owns a condo with a 2024 assessed value of $600,000, bought for $500,000. Taxable value is the greater of the assessed value and the most recent sale price, so $600,000, and the tax is 1% of that times the ownership share: $6,000 canada.ca.
The 2024 return was due April 30, 2025. The penalty under section 47 is the greater of $1,000 (individual) and 5% of the tax plus 3% of the tax for each complete month late laws-lois.justice.gc.ca. Filed on October 15, 2026, the return is 17 complete months late.
| Line | Not exempt | Claimed qualifying occupancy |
|---|---|---|
| UHT payable | $6,000 | $0 |
| Tax used for the penalty | $6,000 | $6,000 (exemption ignored, filed after December 31, 2025) |
| 5% of that tax | $300 | $300 |
| 3% × 17 months | $3,060 | $3,060 |
| Percentage penalty | $3,360 | $3,360 |
| Penalty charged (greater of $1,000 and the line above) | $3,360 | $3,360 |
The right column is the trap. A return filed after December 31 of the following year has its penalty worked out as if certain exemptions didn't apply: properties unusable all year or seasonally inaccessible, uninhabitable properties, primary place of residence, qualifying occupancy, and vacation properties from 2023 canada.ca. So an exempt property owing $0 of tax still draws a $3,360 penalty. Had the same return gone in by December 31, 2025, the penalty would have been the $1,000 minimum.
The not exempt client also owes the $6,000 plus interest at the UHT overdue rate, which is 7% for October 1 to December 31, 2026 canada.ca.
The 2022 trap: Canadian corporations, partners and trustees
For 2022 only, partners of specified Canadian partnerships, trustees of specified Canadian trusts and specified Canadian corporations were affected owners. They owed no tax but still had to file Form UHT-2900 claiming the exemption by April 30, 2023 canada.ca. Those exemptions were repealed effective January 1, 2023, when the same owners became excluded owners.
So a Canadian holding company or family trust that owned a house on December 31, 2022 and never filed still has a missing return. The minimum failure to file penalty is $2,000 for the corporation, or $1,000 if the owner is an individual canada.ca. An owner holding property in more than one capacity, say personally and as a trustee, may need a separate return for each capacity, and some 2022 returns need amending for that reason
canada.ca.
Penalties, interest and how long the CRA can assess
| Rule | UHTA section | What it means for 2022 to 2024 |
|---|---|---|
| Failure to file | 47(1) | Greater of $1,000 (individual) or $2,000 (other owner) and 5% of tax plus 3% per complete month |
| Late past December 31 of the following year | 47(2) | Penalty computed ignoring certain exemptions |
| False statement or omission | 52 | Greater of $500 and 25% of the amount involved |
| Interest | 23 | Overdue rate (7% for October to December 2026), compounded daily |
| Normal assessment period | 36(1) | Four years |
| No return filed | 36(5) | Assessment at any time |
| Penalty waiver | 48 | Minister can waive within 10 calendar years after the year ends |
Every row comes from the Act laws-lois.justice.gc.ca. The unlimited period in subsection 36(5) is why an unfiled 2022 return never ages out. The waiver window in section 48 closes at the end of 2032 for 2022, 2033 for 2023 and 2034 for 2024.
For a penalty waiver request, frame the facts the same way as any other relief file. The general grounds and process are on the taxpayer relief page, and the overdue rate matches the one on CRA interest on overdue taxes.
Sources
Budget 2025: tax measures, eliminating the UHTbudget.canada.ca
Can the CRA still assess a 2022 UHT return my client never filed?
Yes. When an owner hasn't filed a return for a property and year, subsection 36(5) lets the CRA assess at any time, and the four year limit in subsection 36(1) only starts to protect returns that were filed laws-lois.justice.gc.ca.
Do provincial and city vacancy taxes end too?
No. Provincial and municipal vacancy taxes are separate from the federal UHT, and the CRA says it can't answer questions about them canada.ca.
Can a client use fair market value instead of the assessed value for a 2024 return?
Only with a valid election. The owner had to file the election on Form UHT-2900 and get a written appraisal from an accredited arm's length appraiser by April 30 of the following year, so April 30, 2025 for 2024 canada.ca.
Is there still time to ask for UHT penalties to be cancelled?
Yes. Section 48 lets the Minister waive or cancel a penalty within 10 calendar years after the year ends, so a 2022 penalty can be waived until the end of 2032 laws-lois.justice.gc.ca.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.