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ARTICLE · 13 NOVEMBER 2025

Budget 2025: "Inefficient" Underused Housing Tax Eliminated

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The Underused Housing Tax (the "UHT") is levied at a rate of 1% annually on the value of vacant or underused residential property in Canada.

CanadaTax
Andrea Arbuthnot
Andrea Arbuthnot
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The Underused Housing Tax (the "UHT") is levied at a rate of 1% annually on the value of vacant or underused residential property in Canada. It took effect on January 1, 2022, and generally applies to non-resident, non-Canadians.

Budget 2025 proposes to eliminate the UHT as of 2025, such that "no UHT would be payable and no UHT returns would be required to be filed in respect of the 2025 and subsequent calendar years."1 Specifically, the Notice of Ways and Means Motion2 that accompanied Budget 2025 proposes to add the following sections, among others, to the Underused Housing Tax Act (the "UHT Act"):

Tax not payable

1.1 No tax is payable under subsection 6(3) by a person in respect of a residential property for 2025 and subsequent calendar years.

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The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

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