Published 7 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
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Get My Free Estimate →No Underused Housing Tax is payable and no UHT returns are required for 2025 and subsequent calendar years, following the 2025 federal budget. For owners who spent three years navigating a complicated filing regime, that is the end of it going forward.
Two important qualifications. Obligations for 2022, 2023 and 2024 still stand — outstanding returns and penalties for those years remain live. And this has nothing to do with Toronto’s Vacant Home Tax, which is a separate municipal tax at 3% of Current Value Assessment and continues to require an annual declaration from every residential property owner in the city.
What changed
The Underused Housing Tax was introduced as a federal annual tax on vacant or underused residential property, with a filing regime that reached far beyond the owners the tax was aimed at. Corporations, partnerships and trusts holding ordinary Canadian residential property were routinely required to file returns even where no tax was payable, and penalties for non-filing were substantial.
Following the 2025 federal budget, no Underused Housing Tax is payable and no returns are required for 2025 and subsequent calendar years.
What has not changed
| Obligation | Status |
|---|---|
| UHT for 2025 and later years | No tax, no return required |
| UHT for 2022, 2023 and 2024 | Obligations and penalties still stand |
| Toronto Vacant Home Tax | Continues in full at 3% of Current Value Assessment |
| Toronto annual occupancy declaration | Still mandatory for every residential property |
If you have unfiled years
The elimination is forward-looking. If you did not file for 2022, 2023 or 2024 — which is common among owners who held property through a corporation or a family trust and did not realise the regime applied to them — those obligations and any associated penalties remain live. Speak to an accountant about your position rather than assuming the matter closed itself.
What this means practically for a Toronto owner
- Stop worrying about UHT going forward. For 2025 and later years there is nothing to file and nothing to pay.
- Deal with any historical UHT exposure for 2022 to 2024 through your accountant.
- Keep filing the Toronto declaration every year. This is the one that produces real bills on high-value properties — $90,000 a year on a property assessed at $3 million.
- Review any structure that was set up mainly for UHT reasons. If ownership was arranged around the federal filing regime, that reason has now gone and the structure may no longer make sense.
The practical takeaway
One annual compliance obligation has disappeared and a more expensive one has not. If you own residential property in Toronto, the tax to be careful about is the municipal Vacant Home Tax, and the thing that causes almost all of its bills is a missed declaration rather than a genuinely empty house.
Frequently asked questions
Do I still have to file a UHT return?
Not for 2025 or later calendar years. No Underused Housing Tax is payable and no returns are required for those years following the 2025 federal budget. Filing obligations for 2022 through 2024 are unaffected.
What if I never filed for 2022, 2023 or 2024?
Those obligations still stand, along with any penalties. Speak to an accountant about your position for those years rather than assuming the elimination cleared them.
Does this mean vacant properties are no longer taxed?
No. Toronto’s Vacant Home Tax is a separate municipal tax charged at 3% of Current Value Assessment from the 2024 taxation year onward, and it continues in full. Every residential property in Toronto still requires an annual declaration of occupancy status.
Was the UHT repealed entirely?
The tax no longer applies for 2025 and later years. The statute itself remains on the books with a later housekeeping repeal date, but functionally the tax is finished going forward.
Who did the UHT affect?
It was a federal tax aimed principally at vacant or underused residential property owned by non-resident non-Canadians, with an extensive filing regime that also captured many Canadian owners holding property through corporations, partnerships and trusts — which is why the compliance burden became the main complaint.
What should I still be doing annually?
If you own residential property in Toronto, file the Vacant Home Tax declaration every year without exception. Failing to declare defaults the property to vacant, and a false declaration or failure to provide required information carries a penalty of up to $10,000.
Thinking about buying or selling at the top end?
Send me the address, or the shortlist you are considering. I will tell you what the property is actually worth today, what the land is worth without the house, what the transfer tax and carrying costs will be, and whether the deal makes sense. Confidential, always.
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Related reading
- Toronto’s vacant home tax at 3%: what it costs on a luxury home
- Capital gains on a luxury home in Canada: where things stand in 2026
- Should you buy a luxury home in a corporation or trust in Ontario?
- Vacant home taxes in Ontario compared
Sources
Everything above that is a rule, a rate or a published number comes from these. Verify anything that matters to your own deal.
About the author — Jatin Dua, Broker of Record
I’m the Broker of Record at RE/MAX Quantum Realty, 799 The Queensway in Etobicoke, and I work with buyers, sellers and investors across Toronto and the west GTA. A large part of my work sits in the upper end of the market, where the comparables are thin, the rules are heavier and the cost of a wrong number is measured in hundreds of thousands of dollars.
The free estimators on this site are mine. I built them because the first question every owner asks is “what is it worth?” and the honest answer starts with a number you can check yourself. connect@jatindua.com or 437-987-1925.