The federal Underused Housing Tax (UHT) — the annual filing-and-tax regime that quietly caught thousands of Canadian private corporations, trustees, and partners when it took effect in 2022 — has been eliminated for 2025 and every year after that. This is now law, not a budget promise: Bill C-15, the Budget 2025 Implementation Act, No. 1, received Royal Assent on March 26, 2026. But the elimination is not retroactive, and that distinction matters for any business in Alberta, BC, or Ontario that owns residential real estate through a corporation. The change is federal and applies identically in all three provinces.
What just became law
Bill C-15 was tabled in the House of Commons on November 18, 2025 to implement measures from the federal budget delivered that same month, and it passed all three readings, cleared the Senate, and received Royal Assent on March 26, 2026. Division 2 of Part 3 of the Act amends the Underused Housing Tax Act to end the tax "in respect of 2025 and subsequent calendar years." That is the standard this newsletter applies before calling anything "law": a bill only counts once it has cleared both chambers and received Royal Assent, and Bill C-15 has done exactly that.
Sources: Department of Finance Canada — Legislation passes to implement Budget 2025: Canada Strong and Parliament of Canada — LEGISinfo, Bill C-15.
A quick reminder of what the UHT was
The UHT took effect January 1, 2022 as a 1% annual federal tax aimed at foreign-owned vacant or underused residential property. The tax itself rarely applied to Canadian owners, but the filing requirement was much broader than the tax base: any private corporation, and many trustees and partners, that owned residential property in Canada and did not qualify as an "excluded owner" had to file an annual UHT return — even when no tax was owing — or face a minimum penalty. That structure is why so many owner-managed businesses with a single rental property, a staff residence, or a mixed-use building sitting inside a holding company got pulled into a compliance obligation that had nothing to do with foreign ownership.
A 2024 amending bill (Bill C-69) already narrowed this considerably, broadening the "excluded owner" definition so that most Canadian corporations, partnerships, and trusts no longer had a filing obligation starting with the 2023 calendar year, and adding exemptions for properties used to house employees such as farm or seasonal workers. Bill C-15 goes further and removes the tax and the filing requirement entirely, for everyone, from 2025 forward.
2025 and later: no return, no tax, for anyone
As of Royal Assent, affected owners — including corporations that still had a filing obligation for 2023 or 2024 — do not need to file a UHT return or pay the UHT for the 2025 calendar year or any year after it. There is nothing to file for 2025 even if your corporation would previously have qualified as an "affected owner." If your bookkeeper or accountant has a recurring April 30 UHT filing on the calendar for a corporate-owned property, that task can come off the list starting with the 2025 filing year.
Source: Canada Revenue Agency — Underused Housing Tax.
2022, 2023, and 2024 are not forgiven
This is the part most coverage of the repeal glosses over: the elimination is prospective. The CRA's own guidance is explicit that filing, payment, and penalty obligations for the 2022, 2023, and 2024 calendar years remain fully in effect. If your corporation had a UHT filing obligation in any of those years — for example, it owned a residential property and did not meet the narrower pre-2024 excluded-owner tests — and never filed, that exposure did not disappear when Bill C-15 received Royal Assent. The CRA can still assess those years, and the minimum penalty for a late or missing return is $1,000 for an individual owner and $2,000 for a corporate owner (reduced in 2024 from the original $5,000/$10,000 minimums, applied retroactively to 2022).
Source: Canada Revenue Agency — Filing a Return and Paying the Underused Housing Tax.
The CRA has previously extended deadlines and waived penalties and interest for the 2022 filing year specifically, but that relief was tied to filings made by April 30, 2024 and does not extend forward indefinitely to returns that still have not been filed. A corporation that has never filed a UHT return for a year it was required to should not assume the repeal made the problem go away.
Why the Act stays on the books until 2035
One detail worth flagging so it doesn't get misread: Bill C-15 does not repeal the Underused Housing Tax Act itself right away. The formal repeal of the Act and its regulations is scheduled for January 1, 2035. That is a legislative housekeeping mechanism, not a sign that the tax could come back for 2025 onward — it keeps the statute in force long enough for the CRA to continue administering, assessing, and collecting on the 2022–2024 years that remain live, without needing separate transitional legislation. For any business with no outstanding UHT exposure from those three years, the 2035 date has no practical effect.
What to check now
- Confirm whether your corporation had a UHT filing obligation for 2022, 2023, or 2024 and whether it was actually filed. This applies most often to a holding company or operating company that owns a residential property — a rental unit, a property used partly for staff housing, or a mixed residential-commercial building — rather than only its commercial premises.
- If a required return for one of those years was never filed, deal with it now rather than waiting for a CRA assessment; penalties and interest continue to accrue on outstanding obligations for those years regardless of the 2025 repeal.
- Do nothing for 2025 onward — there is no UHT return to prepare or file for that year or any later one.
- Update your compliance calendar so a recurring UHT reminder doesn't linger as a stale task for a filing that no longer exists.
Key takeaways
- Bill C-15 received Royal Assent March 26, 2026 and eliminates the federal Underused Housing Tax — both the tax and the filing requirement — for the 2025 calendar year and all later years.
- 2022, 2023, and 2024 obligations are unaffected. Filing, payment, and penalty exposure for those years remains fully in force; the CRA can still assess them.
- Minimum penalties for a missed or late return remain $1,000 (individuals) / $2,000 (corporations) for the years the filing requirement still applies to.
- The Underused Housing Tax Act itself is not repealed until January 1, 2035 — a drafting mechanism to preserve CRA's authority over the 2022–2024 years, not a reprieve that could bring the tax back.
- This is a federal change and applies identically to corporations in Alberta, BC, and Ontario.
RN Canada works with owner-managed businesses across Alberta, BC, and Ontario on exactly this kind of compliance clean-up — confirming which past-year filings actually applied to a corporate structure and closing out any that were missed before the CRA does it for you. If you're not certain your corporation's UHT history for 2022–2024 is clean, our corporate tax team can review it alongside your broader tax return preparation.