UHT Eliminated: What Non-Resident Property Owners Need to Know for 2026

If you own residential property in Canada as a non-resident, you have likely dealt with the Underused Housing Tax — the annual 1% federal levy on vacant or underused housing that has required filings every year since 2022. The compliance burden was significant: complex returns, strict deadlines, and steep penalties for those who missed them.

That era is now over. On March 26, 2026, Bill C-15 received Royal Assent, officially eliminating the Underused Housing Tax for the 2025 calendar year and all subsequent years. No more annual UHT returns. No more 1% tax.

But before you close the book on the UHT entirely, there is an important caveat: your obligations for the 2022, 2023, and 2024 tax years have not been forgiven. If you have missed filings for any of those years, the Canada Revenue Agency (CRA) is authorized to assess penalties and interest.

This guide covers what was repealed, what you still owe, what the penalties look like, and what other property taxes remain in effect.

What Was the Underused Housing Tax (UHT)?

The UHT was a 1% annual federal tax on Canadian residential properties owned by non-residents, non-citizens, and certain other categories of owners. Introduced under the Underused Housing Tax Act effective January 1, 2022, it applied to properties based on their assessed or fair market value — including those held through Canadian corporations and partnerships.

The tax was designed to discourage foreign ownership of vacant housing. However, in practice, it created a substantial compliance burden that extended well beyond its intended targets. Many Canadian citizens and permanent residents who held property through trusts, partnerships, or private corporations were also required to file UHT returns — even when they owed no tax.

For a non-resident owner of a Metro Vancouver property assessed at $1.2 million, the UHT alone represented a $12,000 annual tax liability, on top of provincial and municipal vacancy taxes.

The federal government ultimately acknowledged that the UHT collected far less revenue than projected while imposing disproportionate compliance costs. The federal budget in 2025 described it as “inefficient” and proposed its elimination.

Is the UHT Eliminated? What Bill C-15 Changed

Bill C-15, the Budget Implementation Act, 2025, received Royal Assent on March 26, 2026. Among its many provisions, it formally eliminates the UHT starting with the 2025 calendar year.

Here is what this means in practice:

• No UHT return is required for the 2025 tax year or any year after
• No UHT payment is due for 2025 or any year after
• Form UHT-2900 is no longer applicable for the 2025 calendar year onward
• The CRA has confirmed that, until further notice, it does not expect UHT filings or payments for 2025 and subsequent years

Do I Still Need to File UHT Returns for 2022–2024?

Yes — all UHT filing obligations for 2022, 2023, and 2024 remain in full force. Bill C-15 does not provide retroactive relief. Tax payments, penalties, and interest for those three years are still enforceable. While reduced minimum penalties now apply, the underlying penalty framework and interest charges remain in full force for unfiled 2022–2024 returns.

If you owned a residential property in Canada on December 31 of 2022, 2023, or 2024 and were classified as an “affected owner” under the UHT Act, you were required to:

• File a UHT return (Form UHT-2900) for each applicable year
• Pay the 1% tax, unless a valid exemption applied
• File by April 30 of the following year (with certain extensions granted for earlier years)

Even if you qualified for an exemption — such as having a qualifying tenancy or being a specified Canadian partner — you were still required to file a return to claim that exemption. Failure to file triggers penalties regardless of whether any tax was actually owed.

What Are the Penalties for Missing a UHT Filing?

The penalty structure for late or missed UHT filings is significant, and it applies to all three active tax years (2022, 2023, and 2024).

Minimum Late-Filing Penalties

Owner Type	Minimum Penalty Per Year
Individual	$1,000
Corporation, trust, or partnership	$2,000

These minimum penalties apply even if no tax is owed — for example, if you qualified for an exemption but failed to file the return claiming it. Note: penalties apply per property per year, so owners with multiple properties face separate penalties for each.

Note: The original penalty amounts were $5,000 for individuals and $10,000 for non-individuals. These were reduced retroactively to 2022 through amendments in Bill C-69 (2024). The reduced amounts of $1,000 and $2,000 now apply to all years from 2022 onward.

The December 31 Trap — UHTA s. 47(2)

This is the single most dangerous UHT provision for non-resident owners. If a return for a given year is filed after December 31 of the following year, certain exemption elections may be denied for the purposes of calculating the penalty — even if you would have otherwise qualified, depending on the specific exemption that would otherwise have applied. This means the penalty may be based on the full 1% tax, not zero.

For example: if you owned a $1.5 million property in 2023 and qualified for a tenancy exemption (no tax owed), but failed to file until 2025, your penalty would be calculated on $15,000 of deemed UHT payable — not zero. This trap turns a $1,000 minimum penalty situation into a $15,000+ penalty situation.

Voluntary Disclosure Program

The CRA has confirmed that it will accept Voluntary Disclosure Program (VDP) applications for late UHT returns. Under the current VDP framework, an unprompted VDP application may result in substantial penalty and interest relief — but outcomes are not guaranteed and depend on the specific circumstances. A VDP application must be prepared with the assistance of a qualified tax professional and must be submitted before the CRA contacts you about the missing returns. Once the CRA initiates contact regarding a specific matter, the taxpayer’s ability to make a valid voluntary disclosure for that matter may be significantly limited.

When Was the Final UHT Filing Deadline?

April 30, 2025 was the final UHT filing deadline ever. The 2024 return was the last UHT return that will ever be required, and it was a firm deadline. Missing it triggers the same penalty structure described above.

If you have not yet filed your 2024 UHT return and you owned Canadian residential property on December 31, 2024, contact your tax advisor now.

For earlier years, the situation is as follows:

Tax Year	Original Deadline	Extended Deadline (Penalty-Free)	Current Status
2022	April 30, 2023	April 30, 2024	Past due — penalties apply if unfiled
2023	April 30, 2024	No extension granted	Past due — penalties apply if unfiled
2024	April 30, 2025	N/A	Past due since April 30, 2025 — penalties apply if unfiled. Final UHT return ever required

Does the BC Speculation and Vacancy Tax Still Apply After UHT Repeal?

Yes — the BC SVT still applies and is increasing in 2026. The elimination of the federal UHT does not affect British Columbia’s Speculation and Vacancy Tax. The SVT is a provincial tax, entirely separate from the UHT, and it remains fully in force.

In fact, the SVT rate for non-resident owners is increasing in 2026.

2026 SVT Rate Changes

Owner Category	Previous Rate	2026 Rate
Foreign owners, satellite families, and untaxed-worldwide-income owners	2.0%	3.0%
Canadian citizens/PRs who are non-exempt (not reporting full income in Canada)	0.5%	1.0%

The SVT applies in 59 communities across British Columbia, including all of Metro Vancouver (excluding Bowen Island), the Capital Regional District, Kelowna, West Kelowna, Nanaimo, Abbotsford, Chilliwack, and Squamish.

Key SVT Deadlines for 2026

• Declaration deadline: March 31, 2026 (now past — file immediately if not yet submitted)
• Payment deadline: First business day in July (July 2, 2026)

Note: The March 31, 2026 declaration covers the 2025 tax year at the previous rates. The new rates apply to the 2026 calendar year, with declarations due in early 2027.

If you own property in an SVT-designated area and have not yet filed your declaration, do so as soon as possible to minimize penalties — even if you qualify for an exemption. Letters with declaration information are mailed to property owners each year.

Vancouver Empty Homes Tax (EHT)

Owners of property within the City of Vancouver should also be aware that the Vancouver Empty Homes Tax remains at 3% — unchanged for 2026. For a non-resident owner of a vacant property in Vancouver, the combined provincial and municipal vacancy tax burden can reach 6% of assessed value, even with the federal UHT gone. For the 2026 tax year onward, the combined burden reaches 6% (3% SVT + 3% EHT). For the 2025 tax year currently being declared, the combined rate was 5% (2% SVT + 3% EHT).

Timeline Summary

Date	Event
January 1, 2022	UHT takes effect
November 2025	Federal budget measures propose UHT elimination
March 26, 2026	Bill C-15 receives Royal Assent — UHT eliminated for 2025+
April 30, 2025	Final UHT filing deadline (2024 tax year) — past
January 1, 2026	BC SVT rate increases to 3% for foreign owners
March 31, 2026	BC SVT declaration deadline
July 2, 2026	BC SVT payment deadline

What You Should Do Now

If you have filed all UHT returns for 2022-2024: No further UHT action is required. Focus on your ongoing provincial obligations (SVT declarations and payment). If you have unfiled UHT returns for any year (2022, 2023, or 2024): Act immediately. Penalties continue to accrue, and the Voluntary Disclosure Program offers your best path to relief — but only before the CRA initiates contact. If you are unsure whether you were required to file: Many property owners — including some Canadian citizens holding property through trusts or corporations — were caught by the UHT’s broad filing requirements without realizing it. A brief review of your ownership structure with a qualified CPA can determine whether you have any outstanding obligations. If you own property in a BC SVT-designated area: If you have not yet filed your 2025 SVT declaration (deadline: March 31, 2026), file as soon as possible to minimize penalties. Budget for the increased tax rate.

How AL Accounting Can Help

AL Accounting is a Vancouver-based CPA firm specializing in non-resident property tax compliance, including Section 216 filings, NR6 waiver applications, and clearance certificates under Section 116.

We can assist with:

• Filing outstanding UHT returns for 2022, 2023, and 2024
• Voluntary Disclosure Program applications to minimize penalties on late filings
• BC SVT compliance and exemption analysis
• Section 216 elections for non-resident rental income
• NR6 applications to reduce monthly withholding tax
• Clearance certificates for non-residents selling Canadian property

If you own Canadian property from outside Canada, your tax obligations extend well beyond the UHT. We help non-resident property owners across Metro Vancouver stay compliant, minimize their tax burden, and avoid costly penalties.

Book a consultation: al-accounting.com/contact | info@al-accounting.com

Frequently Asked Questions

Is the Underused Housing Tax eliminated?

Yes. Bill C-15 received Royal Assent on March 26, 2026, eliminating the UHT for the 2025 calendar year and all subsequent years. No UHT return or payment is required for 2025 onward.

Do I still need to file UHT returns for previous years?

Yes. Filing obligations for 2022, 2023, and 2024 remain in full force. Bill C-15 does not provide retroactive relief. If you have unfiled returns, penalties and interest continue to accrue.

What is the penalty for a late UHT filing?

The minimum penalty is $1,000 per year for individuals and $2,000 for corporations, trusts, or partnerships — even if no tax is owed. If you file more than one year late, the penalty may be calculated on the full 1% tax amount instead of the minimum.

Can I use the Voluntary Disclosure Program for late UHT returns?

Yes. The CRA accepts VDP applications for late UHT returns. An unprompted application may result in substantial penalty and interest relief, but must be submitted before the CRA contacts you about the missing returns.

Does the BC Speculation and Vacancy Tax still apply?

Yes. The SVT is a provincial tax, entirely separate from the federal UHT. The SVT rate for foreign owners is increasing from 2% to 3% in 2026.

When was the last UHT filing deadline?

April 30, 2025 was the final UHT filing deadline. It covered the 2024 tax year — the last year the UHT was in effect.

References

AL Accounting Inc. has served Metro Vancouver clients since 2015, including clients from Hong Kong, mainland China, and Taiwan. This post is for general information only and does not constitute tax advice for your specific situation. Consult a qualified CPA for personalized guidance.

---

Related Articles

• Non-Resident Tax Services
• BC Budget 2026: 5 Tax Changes Small Businesses Must Know
• Cut Your Non-Resident Rental Tax: NR4 vs NR6 Guide