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The underused housing tax Canada brought in is gone for 2025 and later years. The CRA says affected owners don’t need to file a return or pay the tax for those years, after the Budget 2025 Implementation Act received royal assent on 26 March 2026. But it isn’t gone for the past. Returns and payments for 2022, 2023 and 2024 are still required.
What was the underused housing tax?
It was an annual federal tax of 1% on the ownership of vacant or underused housing in Canada, and it took effect on 1 January 2022. The CRA called the people who had to deal with it “affected owners”, and they had to file a return each year, even when no tax came out of it.
| Calendar year | Return and tax |
|---|---|
| 2022 | Still required |
| 2023 | Still required |
| 2024 | Still required |
| 2025 and later | No return and no tax for affected owners |
Do I still have to file for an earlier year?
If you were an affected owner in 2022, 2023 or 2024 and never filed, yes. The CRA’s notice on the proposed amendments to the underused housing tax says the requirement to file a return and pay the tax still applies to those three years. The end of the tax going forward doesn’t wipe them.
The same notice talks about relief on penalties. It describes cutting the minimum failure-to-file penalties to one-fifth of their old level, retroactive to 2022: for individuals from $5,000 to $1,000, and for other owners from $10,000 to $2,000. The notice words that as a proposal, so check the CRA’s UHT pages for the amounts that apply to you now.
What if you never filed for 2022 to 2024?
Suppose you inherited a cottage in 2022 and nobody told you a return was needed. The deadlines are long gone: the CRA’s notice gave until 30 April 2024 for 2022 returns, and returns are generally due by 30 April of the following year. Late is still better than never. Gather the dates you owned the property, who used it and which exemption might have applied, then look at the CRA’s UHT page for the current way to file a late return and for any relief process. We couldn’t confirm a relief process for old years on the pages we read.
What would the tax have cost?
Arithmetic is easy at 1%. On a home valued at $800,000, the annual charge would be $8,000. On $1.5 million it would be $15,000. These are illustrations of the rate only, because we haven’t confirmed how the value was set under the rules, and exemptions could take the bill to zero.
For context, the same house has other yearly costs that never went away. The property tax calculator estimates the municipal bill, and the condo ownership cost calculator adds fees and utilities so you can see the full holding cost of a home that sits empty.
Is the empty home still costly to hold?
Yes. Even without the federal tax, a vacant property carries municipal tax, insurance, heat and upkeep. Your city or province may have its own vacancy rules too, and we haven’t checked any of them.
If you’re weighing whether to rent it out, the rental property calculator compares rent with costs. Rent counts as income, and the rental income tax calculator estimates what you’d owe on it.
Buying as a non-resident brings separate taxes at purchase, unrelated to the UHT. The non-resident buyer tax calculator covers those.
Mistakes to avoid
Don’t assume the news covers you if you skipped an earlier year. It doesn’t.
Don’t rely on a website that still says the tax applies in 2025 or that describes “incentives”. Some of that is out of date, and the wording of the law changed in March 2026. Check the CRA page for the year in question.
And don’t throw out your records. If the CRA asks about 2022 to 2024, you’ll want the dates you owned the property, who lived there and any exemption you relied on.
Where this information comes from
The rate, the dates and the penalty changes come from the CRA‘s pages on the underused housing tax, including its notices on the 2025 changes and the proposed amendments, read on 30 September 2026. The dollar examples are our arithmetic, not CRA figures. We’re an independent site, and no government body is behind it.
Frequently asked questions
Do I have to pay the underused housing tax for 2025?
No. The CRA says affected owners don't need to file a return or pay the tax for 2025 and later calendar years.
Do I still owe it for 2022 to 2024?
The CRA says the requirement to file and pay still applies to those three years.
What was the rate?
An annual federal tax of 1% on the ownership of vacant or underused housing, in effect from 1 January 2022.
Were the late-filing penalties changed?
The CRA says the minimum penalties were cut retroactively: from $5,000 to $1,000 for individuals and from $10,000 to $2,000 for others.
When did the change become law?
The Budget 2025 Implementation Act received royal assent on 26 March 2026, according to the CRA.
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