Have you heard about Canada’s Underused Housing Tax (UHT)? If you’re a Calgary homeowner, this is something you don’t want to ignore. While the UHT was introduced to discourage foreign owners from leaving homes vacant, it also applies to some Canadian property owners. And if you’re required to file but miss the deadline, the penalties are steep—starting at $5,000 for individuals and $10,000 for corporations.
Whether you’re a resident or non-resident of Canada, it’s essential to know how this tax works, if it applies to you, and how to file correctly. So, let’s walk through 10 key tips to ensure you’re on top of your UHT obligations before the deadline in 2025.
1. Understand What the UHT Is
The Underused Housing Tax is an annual 1% tax on the value of residential properties that are vacant or underused. It applies primarily to foreign owners, but some Canadian citizens, corporations, and trusts might also need to file a return—even if no tax is owed.
The tax is calculated on the assessed value or the property’s most recent sale price, whichever is higher, unless you elect to use the appraised value.
2. Know the Filing Deadline
The deadline to file your UHT return and pay any owed tax is April 30, 2025, for the 2024 tax year. Missing this deadline can result in significant penalties, even if you don’t owe any tax.
If you’re unsure whether you need to file, it’s better to be proactive. Penalties for failing to file apply even if you qualify for an exemption.
3. Determine If You’re Exempt
The CRA has outlined several exemptions to the UHT. If you meet one of these conditions, you may not have to pay the tax, but you still need to file a return:
- The property is your primary residence or that of a spouse, common-law partner, or dependent child.
- The property is rented to tenants for at least 180 days of the year in periods of at least one month.
- The property is located in a less densely populated area (not an issue for most Calgary homes).
- You are a Canadian citizen or permanent resident (in most cases, but some trusts, corporations, and partnerships may still need to file).
Check the CRA’s list of exemptions to confirm if one applies to your situation.
4. Confirm If You’re Required to File
Even if you’re exempt from paying the tax, some property owners are still required to file a UHT return. This includes:
- Private corporations that own residential property
- Trustees of certain trusts
- Partners in a partnership that owns residential property
Failure to file can result in penalties, even if no tax is owed.
5. Gather the Required Information
To file your UHT return, you’ll need some key information:
- Property details, including the address and assessed value
- Ownership information, such as whether you own the property directly or through a corporation or trust
- Supporting documents if you qualify for an exemption
Organizing this information early can save you from last-minute stress.
6. Use CRA-Certified Software
Filing online is the easiest way to submit your UHT return. CRA-certified tax software can guide you through the process and ensure you include all the necessary details. Make sure you select a program that supports UHT filings.
If you prefer not to file electronically, you can complete a paper return, but this option takes longer to process.
7. Don’t Forget About Multiple Properties
Do you own more than one residential property? Each property requires its own UHT return. For example, if you own a vacation home in Banff and an investment property in Calgary, you’ll need to file separately for both.
This applies even if all your properties qualify for exemptions.
8. Watch Out for Ownership Details
The CRA is strict when it comes to ownership details. If you own property as part of a partnership, trust, or corporation, you may have different filing requirements. Similarly, if your ownership situation has changed (e.g., you transferred part of your property to a family member), be sure to update this information in your return.
9. Consider an Appraisal
If you believe your property’s assessed value is too high, you can opt to use the appraised value instead. This might help lower your UHT liability. To do this, you’ll need to have a professional appraisal completed and submit the relevant documents with your return.
Make sure the appraisal complies with CRA guidelines and is dated close to the end of the tax year.
10. Avoid Filing Late
The penalties for late filing are no joke. Even if no tax is owed, individuals face a minimum penalty of $5,000 and corporations face $10,000. Filing on time is the simplest way to avoid these costly mistakes.
Set reminders or work with a tax professional to ensure you meet the April 30 deadline.
Key Takeaways
The Underused Housing Tax may seem targeted at foreign owners, but it affects many Canadian property owners too, especially those with corporations or trusts. Filing a return—even if you’re exempt from paying the tax—is critical to avoiding steep penalties.
From understanding the exemptions to organizing your property details, staying ahead of the UHT requirements can save you time, money, and stress. Need help navigating your filing requirements or ensuring you’re compliant with CRA rules? Contact us today, and we’ll guide you through the process to avoid unnecessary penalties.