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Underused Housing Tax


The new federal law, the Underused Housing Tax Act will tax 1% on the value of a vacant or underused residential property that is owned by non-resident non-Canadians from January 1, 2022.

As of January 1, 2022, the Underused Housing Tax (the “UHT”) is in effect across Canada. The Underused Housing Tax Act (the “Act”) implements an annual 1% tax on the value of a vacant or underused residential property that is directly or indirectly owned by non-resident non-Canadians. The UHT is similar to BC’s Speculation and Vacancy Tax and Vancouver’s Empty Home Tax.

The UHT will apply every calendar year to the owner of a residential property in Canada who on December 31 is not an excluded owner and is ineligible to claim an exemption.

Excluded Owner

The Act defines excluded owner as an individual who is a Canadian citizen or permanent resident of Canada (an “Excluded Owner”), except to the extent that they are:

  • the individual owning the property in their capacity as a trustee of a trust or as a partner in a partnership;
  • a publicly listed corporation;
  • an individual owning residential property in their capacity as a trustee of a mutual fund trust, a real estate investment trust, or a specified investment flow-through trust;
  • a registered charity;
  • a cooperative housing corporation;
  • a municipality or para-municipal organization, a hospital authority, public college, school authority or university;
  • an Indigenous governing body or a corporation wholly owned by such a body; or
  • a *prescribed person*.

Non-Excluded Owners will be subject to the UHT, resulting in most residential property owned bynon-Canadian citizens and non-residents being subject to the UHT, regardless if the property is held directly or through a company, trust or partnership.

Tax Rate

The UHT applies at a rate of 1% to the residential property’s taxable value. The residential property’s taxable value is based on the greater of the property tax assessed value or the most recent sale price on or before December 31. For example, a property with a tax assessed value of $1,000,000 and most recently sold for $1,200,000 would have a UHT taxable value of $12,000.


The following exemptions are available to non-Excluded Owners:

  1. The residential property is the owner’s primary place of residence, an owner’s spouse or common law partner, or an owner’s child occupying the property for purposes of certain authorized studies;
  2. One or more qualifying occupants occupy the residential property for at least 180 days of the year;
  3. The residential property owner is a specified Canadian corporation, partnership or trust;
  4. The residential property is a seasonal residence not suitable for year-round use, or the property is seasonably inaccessible because public access is not maintained year round;
  5. A disaster or hazardous condition renders the residential property uninhabitable for a period of at least 60 consecutive days. A disaster can include earthquakes, fire, flood, landslide, or any other natural disaster or dangerous event;
  6. The residential property is uninhabitable for a period of at least 120 days due to renovations;
  7. The owner acquired their interest in the residential property in the calendar year;
  8. The owner of the residential property died during the calendar year or the previous calendar year; or
  9. The residential property is not substantially completed before April of the calendar year.

Filing a Return

Residential property owners must file a yearly return for each residential property. The declaration is due by April 30 for the preceding calendar year. If an owner fails to file a declaration on time, they are liable to a penalty of: (1) $5,000 if the owner is an individual or $10,000 for non-individual owners; and (2) the total of 5% of the applicable tax for property for the calendar year and 3% of the applicable tax for each complete calendar month the return is late.

If you require any legal advice regarding the UHT or real estate services, please contact Bell Alliance LLP at 604-873-8723 or email us at

* This Act contains references to certain prescribed persons, prescribed conditions, and prescribed circumstances. Further regulation may be released to clarify how this Act will apply. Please contact our office to clarify whether this Act will apply to you.

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