Work through it once and find out whether you must file, owe, or can stop here.
Who this is for & what you'll get. You own residential property in Ontario through a corporation, a partnership, or a trust — or you're a non-resident owner — and you've heard about the federal Underused Housing Tax (UHT). The UHT was eliminated for 2025 and later years, so this is now a catch-up guide for the 2022, 2023 and 2024 calendar years: it walks you through, step by step, whether you had a filing obligation for those years, whether you actually owe anything, and where the steep penalties hide.
⚖️ This is a general guide, not legal advice. It can't account for your specific situation. Use it to get oriented, then confirm the details with a licensed Ontario lawyer.
📌 Treadstone is not your accountant. Whether you must file a UHT return and which exemption applies turns on detailed facts. Use this to understand the structure, then confirm your specific position with a tax professional and the CRA.
⏰ Update — the UHT has been eliminated going forward. The Budget 2025 Implementation Act, No. 1 received royal assent on March 26, 2026 and ends the underused housing tax for the 2025 and subsequent calendar years: no UHT is payable and no UHT return is required for those years. The filing and payment rules described below still apply to the 2022, 2023 and 2024 calendar years — so this guide still matters if you have unfiled returns for one of those years. Confirm your position with the CRA.
The one idea that trips everyone up
The UHT is two obligations, not one:
- A filing obligation — for certain owners, you must file a UHT return for each property, even if you owe $0.
- A tax obligation — a 1% annual tax on the property's value, which many owners avoid entirely through an exemption.
People assume that "no tax owing" means "nothing to do." With the UHT, that's a costly assumption. You can owe nothing and still be required to file — and the penalty is for not filing, not for not paying.
⚠️ Watch out: The penalties for failing to file a required UHT return are severe — under section 47 of the Underused Housing Tax Act they start at a minimum of $1,000 per return for an individual and $2,000 for a corporation or other non-individual (as of 2026 — reduced from $5,000 and $10,000, back to the 2022 year), and can be far higher (confirm the current figures with the CRA). They apply per property, per year. This is the part to take seriously.
How to use this guide
The tax was introduced under the federal Underused Housing Tax Act. Work through the four questions in order. Each one either stops you (no filing) or moves you forward. Then check the exemptions and the deadline.
Question 1 — Is the property residential property?
The UHT applies to residential property in Canada — broadly, detached homes, semis, rowhouse units, and condo units (and similar). Purely commercial property is outside it.
- No, it's commercial / not residential → Stop. The UHT does not apply.
- Yes, it's residential → Go to Question 2.
Question 2 — Are you an excluded owner or an affected owner?
This is the heart of the whole regime. The Act splits owners into two groups based on who or what holds title on December 31.
Excluded owners (generally NO filing)
If you fall here, you generally have nothing to file. Excluded owners typically include:
- Individuals who are Canadian citizens or permanent residents holding the property personally (in their own name) — not as a trustee of a trust or partner of a partnership.
- Certain publicly listed corporations, registered charities, co-operatives, municipalities, and other listed public bodies — and, for the 2023 and 2024 calendar years, specified Canadian corporations, partnerships and trusts.
✅ The big takeaway for most homeowners: If you're a Canadian citizen or permanent resident and your name is on the title personally, you are almost certainly an excluded owner with no UHT filing to do.
- You're an excluded owner → Stop. No UHT return required (confirm your status with the CRA).
- You're not on that list → Go to Question 3.
Affected owners (MUST file)
If you are not an excluded owner, you are an affected owner and you must file a UHT return for the property — even if an exemption brings your tax to $0. Affected owners commonly include:
| You hold the property as… | Filing? |
|---|---|
| A private corporation (incorporated in Canada or elsewhere) | Yes — must file |
| A partner, where the property is partnership property | Yes — must file |
| A trustee of a trust (other than certain estates) | Yes — must file |
| A non-resident, non-Canadian individual (not a citizen or PR) | Yes — must file |
⚠️ Watch out: Holding your home or rental through a corporation or a family trust — even a small Ontario holding company — typically makes you an affected owner with a filing duty. Many owners are caught here without realizing it.
Question 3 — Does an exemption apply (so you file but owe $0)?
If you're an affected owner, you must file — but you very often won't owe the 1% tax, because the Act provides numerous exemptions. You claim the exemption on the return. Common categories include:
- Primary place of residence — the property is the primary residence of the owner (or their spouse/common-law partner or child in certain cases).
- Qualifying occupancy — the property is occupied for qualifying periods under a written arrangement at fair value (e.g., genuine arm's-length tenants for enough of the year).
- Not suitable or not available for year-round use, or seasonally inaccessible.
- Uninhabitable for a period due to disaster or major renovation (subject to limits).
- New owner in the year, death of an owner, or certain newly constructed property situations.
- Certain specified Canadian corporations, partnerships, and trusts (based on Canadian ownership levels) — but note this was an exemption only for the 2022 calendar year; effective January 1, 2023 those exemptions were repealed and those owners became excluded owners with no return to file at all.
💡 Tip: The exemption you can claim depends on facts like occupancy, who lives there, and the ownership structure. Two owners of identical condos can land in different places. The exact conditions and thresholds change — verify the current list and requirements with the CRA.
- An exemption applies → You must still file, but tax owing is $0.
- No exemption applies → You must file AND pay the 1% tax (see Question 4).
Question 4 — How much tax, and by when?
If you're an affected owner with no applicable exemption, the tax is calculated as a 1% annual rate applied to the property's value (using a value determined under the Act), multiplied by your ownership percentage (confirm the current rate and valuation rules with the CRA).
The deadline
There was a separate annual filing deadline for the UHT return for each of the 2022, 2023 and 2024 calendar years; no return is required for 2025 or later. The deadlines and administrative relief for those years changed more than once — confirm the date for the year you are filing directly with the CRA before you rely on it. File late and the per-return penalties can apply even when no tax is owed.
⏰ Mark the filing deadline now if any property you hold could make you an affected owner. The cost of a missed filing dwarfs the cost of a $0 tax bill.
The decision tree at a glance
Residential property in Canada?
├─ No ──────────────────────────────► STOP. UHT does not apply.
└─ Yes
│
Are you an EXCLUDED owner?
(Citizen/PR holding personally, public corp,
charity, municipality, etc. — and, for 2023
and 2024, specified Cdn corporations,
partnerships and trusts)
├─ Yes ──────────────────────► STOP. No UHT filing.
└─ No → You are an AFFECTED OWNER → YOU MUST FILE
│
Does an EXEMPTION apply?
(primary residence, qualifying
occupancy, newly built or uninhabitable,
specified Cdn entity for 2022, etc.)
├─ Yes ──────────► File the return; tax = $0.
└─ No ──────────► File the return AND pay 1%.A quick scenario
Scenario. Priya is a Canadian citizen who owns a Mississauga rental condo personally. → She's an excluded owner. No UHT filing.
Now suppose Priya holds the same condo through Priya Holdings Inc. → The corporation is an affected owner. It must file a UHT return. If the condo is rented year-round to arm's-length tenants at fair value, a qualifying-occupancy exemption may bring the tax to $0 — but the return is still required. Skipping it risks the per-return penalty. (Confirm all of this with the CRA.)
Questions to ask yourself
- Whose name is actually on title? A person, a corporation, a partnership, or a trustee?
- Am I a Canadian citizen or permanent resident holding it personally?
- Is any property held through a holding company or family trust I set up for other reasons?
- For each affected property, which exemption can I support with documents (a lease, occupancy records, residency)?
- Do I know the filing deadline for each of 2022, 2023 and 2024 — and have I confirmed it with the CRA?
- Have I filed for every prior year I may have been an affected owner?
How Treadstone Law can help
The UHT punishes confusion about who owns what. If your property sits inside a corporation, partnership, or trust, a short review now can prevent an expensive penalty later.
- Flat-fee clarity — you know the cost before we start.
- Online intake — send us your ownership structure and we'll help you sort out filing duty from tax owing.
- All of Ontario, virtually — based in Mississauga, serving the whole province.
We can review how your property is held, flag whether you're an affected owner, identify which exemption fits, and coordinate the filing with your accountant — so you're not the owner who owed nothing but got penalized anyway.
📞 1-844-900-1070 · Learn more at treadstonelaw.ca/tax · See flat fees at treadstonelaw.ca/pricing · Start now at treadstonelaw.ca/start-file
This is not legal advice
This guide is general information, not legal advice. Reading it does not create a lawyer-client relationship. Ontario laws, tax rates, and government programs change, and how the law applies depends on your specific facts. For advice about your situation, speak with a licensed Ontario lawyer. Treadstone Law is licensed by the Law Society of Ontario — reach us at 1-844-900-1070 or start a file online.