Canada’s Underused Housing Tax is a federal, CRA-administered tax on vacant or underused residential property, and it’s a different program from Toronto’s own Vacant Home Tax: different level of government, different filers, different rules. Most individual Canadian owner-occupiers were never required to file a return for it, and as of the 2025 tax year, the filing requirement has been eliminated for everyone. This guide explains who actually had to file for the years the tax applied, what happens if a required return from 2022 through 2024 was never filed, and how the federal tax relates to Toronto’s own municipal one. It sits alongside our guide to Toronto’s Vacant Home Tax as the other half of this picture. For everything else a Toronto owner needs to know, see our complete Toronto real estate guide.
What the Underused Housing Tax is, and how it differs from Toronto’s Vacant Home Tax
The Underused Housing Tax, or UHT, is a federal tax administered by the Canada Revenue Agency, first effective January 1, 2022, set at 1% of a residential property’s value. Toronto’s Vacant Home Tax is something else entirely: a City of Toronto by-law, administered through the City’s own portal, charging up to 3% of a property’s Current Value Assessment when it sits vacant for more than six months of the year. The two get confused constantly, and it’s worth stating the distinction plainly before anything else. The two sit at different levels of government, federal versus municipal. Their scope differs too: the UHT can apply to residential property anywhere in Canada, while the Vacant Home Tax applies only within Toronto. And they reach different filers, since the UHT targets specific ownership categories rather than every property owner. Critically, satisfying one has never satisfied the other. A Toronto property owner could, for the years the UHT applied, have faced both taxes on the same property, from two entirely separate governments, with two entirely separate filings.
Why the tax no longer applies from 2025 onward
When the Underused Housing Tax applied, and when it stopped: filing and penalties remain live for 2022 through 2024, while 2025 onward is repealed, with nothing to file and no tax owed.
This is the most current fact anyone researching the UHT needs to know, and a lot of what’s still circulating online predates it. The Underused Housing Tax has been repealed for the 2025 calendar year and every year after it. The repeal came through the Budget 2025 Implementation Act, No. 1, which received royal assent on March 26, 2026, and the CRA’s own Underused Housing Tax notice confirms the change directly. Effective for 2025 onward, no UHT return needs to be filed and no UHT is payable by anyone, in any ownership category. If you’re reading this in 2026 or later wondering whether you need to file a UHT return for the current year, the direct answer is no. Nobody does.
That repeal doesn’t erase what came before it. The 2022, 2023 and 2024 calendar years are unaffected: every filing and payment requirement that applied to those three years still applies today, exactly as it always did, along with the penalties for a return that was required and never filed. So the practical question for most readers isn’t “do I need to file this year,” which is now simply no, it’s “did I own an affected property on December 31 of 2022, 2023 or 2024, and did I file what was required for those years.” That’s the question the rest of this guide answers.
Who had to file, for the years the tax applied
The CRA’s own Underused Housing Tax framework divides property owners into two categories: excluded owners, who never had any UHT filing obligation at all, and affected owners, who did, whether or not tax was actually owed. Excluded owners are mainly Canadian individuals who own residential property directly, in their own name, plus most public corporations. If you’re a Canadian citizen or permanent resident who owns your home in your own name, you were an excluded owner in every year the tax applied. You never had to file, and nothing about the tax’s history affects you now.
Affected owners were a narrower group: Canadian private corporations that own residential property, including bare trustee corporations; individuals holding an interest in a property as a trustee of a trust or as a partner in a partnership, with an exception for a Canadian executor administering an estate; and non-resident, non-Canadian owners generally. Anyone in one of those categories who owned a residential property in Canada on December 31 of 2022, 2023 or 2024 was required to file a UHT return for that year, regardless of whether any tax ended up being owed once exemptions were applied.
Exemptions, and whether an exempt owner still had to file
Yes, an exempt affected owner still had to file. This is the point that trips people up most, because it’s counterintuitive: qualifying for an exemption and being excused from filing are two different things. An affected owner who met an exemption, because the property served as a primary residence or met “qualifying occupancy” rules, was a seasonal property in an eligible area, or was seasonally inaccessible or uninhabitable for part of the year, still owed no tax. But they were still required to submit a UHT return claiming that exemption for each year it applied. An affected owner who simply didn’t file at all, on the assumption that owing nothing meant nothing needed to be sent in, was wrong, and that gap is exactly what the penalty in the next section attaches to.
Penalties for a 2022-2024 return that was never filed
The minimum penalty for a required UHT return that wasn’t filed on time is $1,000 for an individual and $2,000 for a corporation. Those are reduced figures: the original minimums, when the tax first took effect, were $5,000 and $10,000, and the CRA lowered them retroactively across the years the tax applied. Where tax was actually owed and unpaid, the penalty can climb higher the longer a return goes unfiled, with no statutory cap in the legislation. None of this is a new, current-year risk, since no new UHT obligation exists for 2025 onward. It’s a live risk only for someone who was an affected owner for 2022, 2023 or 2024 and never filed for one or more of those years.
If that describes you, the CRA has previously accepted Voluntary Disclosure Program applications for relief on missed UHT filings, including confirming that relief from penalties and interest is available even where no tax was actually owed under the return. That’s a real, current option worth raising directly with a CPA or tax lawyer rather than assuming a missed filing from those years is beyond fixing.
Can a property owe both taxes at once?
For the years the UHT applied, yes. A Toronto property could be subject to both the federal Underused Housing Tax and the City’s own Vacant Home Tax in the same year, because they’re separate obligations to separate governments. Filing and paying one never satisfied the other, and an owner in an affected UHT category who also left a Toronto property vacant for more than six months of the year could have owed both. That non-substitution principle still matters for anyone catching up on a 2022-2024 UHT filing, even though no new UHT obligation exists going forward. Toronto’s own Vacant Home Tax, by contrast, is an ongoing annual requirement with no repeal behind it. Our guide to Toronto’s Vacant Home Tax covers who has to declare, the current rate, and the deadline in full.
Frequently asked questions
What is the Underused Housing Tax, and how is it different from Toronto’s Vacant Home Tax?
The Underused Housing Tax is a federal tax administered by the Canada Revenue Agency on certain vacant or underused residential property in Canada, first effective January 1, 2022 at 1% of a property’s value. Toronto’s Vacant Home Tax is a separate City of Toronto by-law charging up to 3% of a property’s assessed value when it sits vacant for more than six months of the year. They differ on every level that matters: one is federal, one is municipal; one can apply anywhere in Canada, the other only inside Toronto; and one targets a narrow set of ownership categories, while the other applies to essentially every residential property owner in the city. Satisfying one has never satisfied the other, and a Toronto property could, in the years the UHT applied, have been subject to both at once.
Do I have to file an Underused Housing Tax return this year?
No. The Underused Housing Tax has been repealed for the 2025 calendar year and every year after it, following the Budget 2025 Implementation Act, No. 1, which received royal assent on March 26, 2026. No UHT return needs to be filed and no UHT is payable for 2025 or any later year, for any owner, in any category. The only live question left is whether you had an obligation for 2022, 2023 or 2024 that was never met, since the repeal doesn’t erase those three years’ requirements. If you own your home directly in your own name as a Canadian citizen or permanent resident, you were never required to file in any year the tax applied.
Who actually had to file an Underused Housing Tax return, for the years it applied?
Mainly non-resident, non-Canadian owners, plus certain Canadian entities: private corporations that own residential property, including bare trustee corporations, and individuals holding an interest as a trustee of a trust or a partner in a partnership, with an exception for a Canadian executor administering an estate. Canadian individuals who own residential property directly in their own name, and most public corporations, were “excluded owners” who never had a filing obligation at all. Anyone in an affected category who owned a residential property in Canada on December 31 of 2022, 2023 or 2024 had to file for that year, whether or not tax was actually owed once exemptions were applied.
If I qualified for an exemption, did I still need to file?
Yes. Qualifying for an exemption meant no tax was owed, but it didn’t remove the filing requirement itself. An affected owner whose property served as a primary residence, met qualifying occupancy rules, was a seasonal property in an eligible area, or was seasonally inaccessible for part of the year, still had to submit a UHT return claiming that exemption for each applicable year. Assuming that owing nothing meant nothing needed to be filed was a common and costly mistake, since the minimum late-filing penalty applied regardless of whether the return would have shown any tax owing.
What’s the penalty for a 2022-2024 return that was never filed?
The minimum penalty is $1,000 for an individual and $2,000 for a corporation, down from the original $5,000 and $10,000 minimums that applied when the tax first took effect. Where tax was actually owed and unpaid, the penalty can grow the longer a return goes unfiled, with no cap set in the legislation. This risk only applies to the 2022, 2023 and 2024 tax years, since no new UHT filing obligation exists for 2025 onward. The CRA has previously accepted Voluntary Disclosure Program applications for relief on a missed UHT filing, including cases where no tax was actually owed, so catching up on an old return is worth raising with a CPA or tax lawyer rather than assumed to be a lost cause.
Where should I go to figure out my own filing obligation, and where can I read about Toronto’s own Vacant Home Tax?
A CPA or tax lawyer is the right place to confirm your own status for the 2022-2024 UHT years, since ownership structures, trusts and partnerships can shift someone’s category in ways a general guide can’t account for. This page describes the rules; it isn’t tax advice for your specific situation. If what you actually meant to look up was Toronto’s own municipal tax, not the federal one, our guide to Toronto’s Vacant Home Tax covers who has to declare, the current 3% rate, and the annual deadline, and our guide to property tax in Toronto covers the broader ownership-cost picture.
Ownership structures and filing history vary enough that a specific answer always comes from a CPA or tax lawyer, not a general guide. Read our guide to Toronto’s Vacant Home Tax for the municipal side of this, or explore the rest of our guides for more on owning property in Toronto.