Can a property owner owe both a municipal vacant home tax and the federal Underused Housing Tax at the same time?

Yes - a property owner can genuinely be subject to both a municipal vacant home tax, such as Toronto's, Ottawa's, or Hamilton's, and the federal Underused Housing Tax on the very same property, because these are entirely separate levies imposed by different levels of government, each with its own tests, exemptions, rates, and filing or declaration process. Being caught by one does not exempt you from the other, and satisfying one government's exemption criteria says nothing about whether you also qualify for relief under the other regime.

This is a common point of confusion, since both taxes are conceptually aimed at discouraging leaving housing vacant, but they were designed independently and do not coordinate their rules or defer to each other. An owner in a city with its own municipal vacant home tax needs to separately work through that municipal declaration and the federal Underused Housing Tax filing, if applicable, as two distinct obligations rather than assuming one covers the other.

Treat the municipal vacant home tax and the federal Underused Housing Tax as two separate obligations, and confirm your position under each one independently.