💡 Starting in 2022, Canada will have a new federal tax — the Underused Housing Tax (UHT). Its purpose is to limit the purchase and ownership of housing that is “underused” or owned by individuals who do not have permanent resident status or Canadian citizenship.
⚠️ Many owners, especially new Ukrainian arrivals with a CUAET visa, were unaware of their obligation to file a return. And even if the tax is $0, the UHT-2900 report must be submitted — otherwise, the CRA (Canada Revenue Agency) will impose heavy fines.
🔹 What is the Underused Housing Tax?
UHT is a 1% tax on the value of residential property that is considered “underused” or owned by a person without PR status or Canadian citizenship.
- Reporting date: December 31 of each year
- Submission deadline: April 30 of the following year
- Form: UHT-2900 (submitted by mail or through an accountant)
🔹 Who must file a UHT return?
So-called “affected owners” — anyone who has registered ownership of a home, even if they live there or rent it out.
This category includes:
- Foreigners (non-citizens and non-PRs of Canada)
- Temporary residents (CUAET, work permit, study permit)
- Owners through corporations, partnerships, or trusts
- Individuals who own even a share (e.g., 50%)
📌 Even if no tax is payable, the return is mandatory.
✅ Who is exempt from paying (but not from filing a return)
- Temporary residents who were in Canada for more than 183 days in the reporting year
- Real estate that was rented out for at least 180 days per year
- A house that was the primary residence
- Newly built or newly purchased property
- Joint ownership with a Canadian citizen or PR
➡️ Even if you are exempt, you must still file form UHT-2900.
🏘️ What properties are subject to UHT
- Condos
- Townhouses
- Houses (detached, semi-detached, duplex)
- Other residential properties with ≤3 units
📌 Land parcels without buildings are not subject to UHT.
📉 How the tax is calculated
1% × the value of the property as of December 31. The higher of the two amounts is used:
- tax assessed value, or
- purchase price.
🧾 You can file an election for an independent assessment if it is more advantageous.
🚨 File retroactively without penalty — it's not too late!
Many owners were unaware of this tax, so the CRA has extended the penalty-free period until April 1, 2025.
| Reporting year | As of | No penalty until |
|---|---|---|
| 2022 | December 31, 2022 | April 1, 2025 |
| 2023 | December 31, 2023 | April 1, 2025 |
⚠️ After this date:
- $5,000 penalty for individuals
- $10,000+ for corporations
Even if the tax = $0!
🧾 What you need to file UHT-2900
-
Your status in Canada (CUAET, PR, work permit, etc.)
-
Address and type of property
-
Date of purchase
Astropsychologist -
Use (residential, rental, vacant)
-
Tax assessment
-
Proof of rental or occupancy
-
Number of days spent in Canada
📌 CRA only accepts UHT by mail or through an accountant.
👨👩👦 Property registered to a relative: who should file?
Many newly arrived Ukrainians have purchased property but registered it to relatives who are Canadian citizens.
📌 Important: The UHT is filed by the person who holds the title to the property, not the person who actually pays for or lives in it.
If the owner is a Canadian citizen, UHT is not filed, but:
- CRA may request an explanation regarding the user of the property
- There may be an obligation to file bare trust reports
- In case of sale — questions regarding capital gain and the actual owner
How to reduce risks:
✅ Enter into a formal loan agreement or bare trust ✅ Maintain a transparent financial history ✅ After obtaining PR status, re-register the property ✅ Keep documents confirming residence
⚖️ Consequences of non-filing
- $5,000 fine for individuals
- $10,000+ for corporations
- CRA may initiate an audit even if the tax = $0
- Penalties are assessed separately for each year and each property
🏡 Remember
UHT is not a tax on foreigners, but a requirement for property transparency. File your report on time — and sleep peacefully.