The Underused Housing Tax (UHT-2900)

CRA’s newest annual filing obligation – The Underused Housing Tax (UHT-2900). Don’t let the name fool you!

Effective January 1, 2022, the cost of residential property ownership may have increased for some owners with the passage of the Underused Housing Tax Act (UHTA).

The UHTA imposes an annual filing requirement of a UHT-2900 return for every person/entity who owns a residential property in Canada as of December 31; unless the individual/entity meets the definition of an "excluded owner."   The annual return is based on the calendar year and is a stand-alone filing. It is NOT part of the personal tax filing or corporate tax filings.

The UHTA further imposes a 1% tax on the value of a residential property for those properties which this law deems "underused." However, the tax may not be applicable if certain conditions are met. These conditions are referred to as exemptions in the law. The only way to claim an exemption from tax is to file a UHT-2900 return.

The deadline for filing the UHT-2900 return and, where applicable, paying the tax is April 30 of the following year.

If you are required to file and return and fail to do so, penalties are a minimum of:

• $5,000 for an individual owner

• $10,000 for an owner other than an individual

Further, if the UHT-2900 is required but not filed, there is a risk of losing access to exemptions, resulting in a 1% tax on a residential property's value. This tax would be on top of the $5,000/$10,000 failure to file penalties, as above.

Please click here to access a detailed decision tree to assist you in determining your obligations.

Please be advised this is not part of our standard service offerings; it is not part of the corporate year-end engagement or personal tax preparation services. We are happy to assist with determining your filing obligation, investigating which tax exemptions you may qualify for, and/or filing this return. We will only do so if specifically requested.

Additional information on the tax can be found on the Government of Canada's information page.