Bill C-15 and the Underused Housing Tax (UHT): Proposed Elimination of UHT Filings Starting in 2025
Last updated: January 2026
The federal Underused Housing Tax (UHT) has created significant compliance obligations for Canadian and non-resident property owners since its introduction in 2022. Although the policy objective was to address vacant and underused housing owned by non-residents, the legislation was drafted broadly and, in practice, captured many Canadian owners—particularly those holding property through corporations, trusts, or partnerships. There were some changes in 2023 that removed filing requirements for some of the otherwise affected owners.
In November 2025, the Government of Canada introduced Bill C-15 (Budget 2025 Implementation Act, No. 1), which proposes to effectively suspend the UHT regime beginning with the 2025 calendar year, subject to Parliamentary approval. If enacted, these changes would substantially reduce the ongoing compliance burden associated with the UHT.
Overview of the Underused Housing Tax (UHT)
The Underused Housing Tax is an annual federal tax equal to 1% of the value of certain residential properties in Canada that are considered vacant or underused. The tax took effect on January 1, 2022.
While the UHT primarily targets foreign national owners, it can also apply to certain Canadian owners depending on how property ownership is structured. In particular, corporations, trustees, and partners may fall within the scope of the legislation even where no tax is ultimately payable, resulting in annual filing requirements.
The UHT return is filed using Form UHT-2900, and where a return is required, it is generally due by April 30 of the following calendar year.
Excluded Owners vs. Affected Owners
An important concept under the UHT framework is the distinction between excluded owners and affected owners.
- Excluded owners generally do not have to file a UHT return and do not pay the tax.
- Affected owners may be required to file Form UHT-2900 for each reportable property, even if an exemption applies and no tax is payable.
Following legislative amendments that are already in force, starting with the 2023 calendar year, the majority of Canadian individual owners are excluded owners. However, this exclusion does not automatically apply in all cases. Ownership through certain entities or fiduciary roles can still result in filing obligations, even for Canadian residents.
What Bill C-15 Proposes
Elimination of UHT Filing and Tax for 2025 and Later Years
If Bill C-15 is enacted as proposed, it would introduce two key changes:
- No Underused Housing Tax would be payable for the 2025 calendar year and subsequent years, and
- No UHT return would be required for 2025 and subsequent years, despite the existing filing provisions in the Underused Housing Tax Act.
In practical terms, this would mean that the UHT regime would cease to apply after the 2024 calendar year, provided the bill becomes law.
Legislative Status
As of January 2026, Bill C-15 has not yet received Royal Assent and is still proceeding through the Parliamentary process. Until the bill is enacted, the existing UHT legislation remains in force.
No Retroactive Relief for 2022–2024
A critical point for property owners is that Bill C-15 does not provide retroactive relief.
The proposed amendments do not eliminate filing or payment obligations for the 2022, 2023, or 2024 calendar years. Where a UHT return was required for any of those years, the obligation remains, along with potential penalties and interest for late or missing filings.
Key considerations by year include:
- 2022: Some owners benefited from limited administrative relief on penalties where filings were made by extended deadlines, but unfiled returns may still need to be addressed.
- 2023: Many Canadian owners became excluded owners beginning this year; however, certain ownership structures and non-resident situations continue to trigger filing requirements.
- 2024: Affected owners remain subject to the standard UHT filing rules.
Each year must be reviewed separately based on ownership structure and residency status.
Future Repeal of the UHT Legislation
In addition to suspending UHT filing and payment obligations starting in 2025, Bill C-15 also proposes a formal repeal of the Underused Housing Tax Act and related regulations effective January 1, 2035. This delayed repeal is intended as a legislative clean-up measure following the proposed suspension of the regime.
What Property Owners Should Do Now
While the proposed changes under Bill C-15 are welcome, property owners should take a cautious and proactive approach:
- Confirm how each residential property is owned (individual, corporation, trust, estate, or partnership).
- Determine whether you were an excluded or affected owner for each year from 2022 to 2024.
- Verify whether Form UHT-2900 was required and filed for each applicable year.
- Address any outstanding filings or CRA correspondence promptly to minimize penalties and interest.
- Monitor the progress of Bill C-15 to ensure your 2025 planning reflects the law as enacted, not merely proposed.
Final Thoughts
Bill C-15 represents a significant policy shift and, if enacted, will substantially reduce the ongoing compliance burden associated with the Underused Housing Tax. However, until the legislation receives Royal Assent—and for all years prior to 2025—owners must continue to assess and meet their UHT obligations carefully.
Professional advice is strongly recommended, particularly for owners with multiple properties or non-standard ownership structures. We continue to assist clients with UHT reviews, late filings, and CRA correspondence, and we remain committed to keeping clients informed of important legislative developments affecting their real estate holdings.
If you are behind UHT Filing requirements for the past years, or in need of non-resident tax services, get in touch with us to help you correct non-compliance. Get in touch with us today.
