The federal Budget 2021 announced the government’s plans to implement, effective January 1, 2022, a national, annual one-per-cent tax on the value of non-resident, non-Canadian owned residential real estate that’s vacant or underused.

The government is finalizing draft legislation for the proposed underused housing tax (UHT). They’re releasing a draft later this year and will include the final legislation in a bill introduced in Parliament sometime in 2022.

Who would pay the UHT?

If passed, the UHT will apply to an owner of residential property in Canada as of December 31 of the calendar year if:

  1. the owner is required to file an annual declaration for the calendar year; and
  2. the owner doesn’t qualify for an exemption.

Calculating the tax

The UHT is calculated by multiplying the specified value of the property by the one-per-cent rate of the UHT.

An owner would be liable for the UHT in proportion to their “interest” in the property.

What’s residential property under the UHT?

Residential property would include:

  • detached homes, duplexes, and triplexes;
  • semi-detached homes, row-house units, residential condominium units, and other similar premises that is, or is intended to be, a separate parcel or other division of real property owned, or intended to be owned, apart from any other unit in a building; and
  • together with any common areas and other appurtenances and the subjacent and immediately contiguous land reasonably necessary for the use and enjoyment as a place of residence for individuals.

Who’s an owner of residential property under the UHT?

If a residential property has a single owner, the owner pays the tax.

If a residential property has multiple owners:

  • if property is held by owners as joint tenants, each owner will have an equal interest in the property; and
  • if the property is held by owners as tenants-in-common:
    • if each owner’s interest is specified on any instrument evidencing ownership, each owner would be regarded as having that specified interest, and
    • otherwise, each owner would be regarded as having an equal interest in the property.

Mandatory declaration

Every owner of a residential property, other than an excluded owner, would be required to file an annual declaration with the Canada Revenue Agency (CRA) for each residential property they own on or before April 30 of the following calendar year.

An owner’s declaration for the 2022 calendar year would be required to be filed on or before April 30, 2023.

To file a declaration with the CRA, certain owners may need to pre-register with the CRA in advance of filing their declaration.

Excluded owners

Excluded owners include, as of December 31 of the calendar year:

  • an individual who is a Canadian citizen or a permanent resident of Canada, except where the individual holds an interest in property. 
    • as a partner of a partnership, or
    • as a trustee of a trust, but not including a personal representative of a deceased individual or the estate of a deceased individual;
  • a corporation incorporated under the laws of Canada or a province and the shares of which are listed on a Canadian stock exchange;
  • a registered charity;
  • a cooperative housing corporation;
  • an Indigenous governing body or a corporation owned by an Indigenous governing body;
  • a municipality or a corporation owned by a municipality;
  • the government of Canada or an agent of the Government of Canada;
  • the government of a province or an agent of the government of a province; and
  • other public service bodies such as universities, public colleges, school authorities, and hospital authorities.

The declaration

An owner of a residential property must report in their declaration:

  • the calendar year to which the declaration relates;
  • the civic address of the property and other property-related information;
  • the legal name of the owner;
  • contact information of the owner;
  • the type of owner (individual other than as a partner of a partnership or trustee of a trust, corporation, partner of a partnership, trustee of a trust;
  • the owner’s interest in the property (as a percentage), and if the interest is less than 100 per cent:
    • the form of ownership (i.e., joint tenants, tenants-in-common), and
    • the names of any other owners of the property having an interest in the property of 10 per cent or more;
  • the residential property type (detached, semi-detached, row-house, condominium unit, duplex, triplex;
  • the value of the property and how it was determined; and
  • any exemptions and information related to any exemptions.


There are exemptions for:

  • an owner or a qualifying occupant who occupies the home in periods of at least one month that total at least six months of the year. A qualifying occupant includes the owner’s spouse, child or parent;
  • held by a partner of specified Canadian partnership;
  • held by a trustee of specified Canadian trust;
  • property not suitable for year-round use;
  • property uninhabitable due to a disaster or hazardous conditions;
  • property undergoing major renovations;
  • for the year of acquisition of an interest in a property;
  • for an owner with at least a 25 per cent interest in the property who dies, for the calendar year in which the death occurs;
  • newly constructed property in the calendar year of construction; and
  • new property held by a developer as inventory for sale.

Payment due date

Payment will be remitted to the CRA on or before April 30 of the following calendar year.


An owner of residential property required to file a declaration, who fails to file by April 30 of the following calendar year will face a penalty of:

  • $5,000, if the owner is an individual; or
  • $10,000 if the owner is not an individual.


Learn more about this federal tax.