Underused Housing Tax (UHT)

The Underused Housing Tax is a federal 1% annual tax on the assessed value of vacant or underused residential property owned by non-resident non-Canadians, as well as certain Canadian owners such as specified corporations and trustees. It was administered by the Canada Revenue Agency under the federal Underused Housing Tax Act, not by a provincial BC authority, meaning it applied uniformly across Canada including British Columbia. BC property owners subject to the UHT were required to file a UHT return with the CRA for each applicable residential property they held. The BC Financial Services Authority (BCFSA) and the Real Estate Services Act (RESA) govern licensee conduct in BC but have no direct role in UHT administration.

Yes — Bill C-15 received Royal Assent on March 26, 2026, eliminating the UHT for the 2025 tax year and all subsequent years, so no UHT return is required and no tax is payable for 2025 onward anywhere in Canada, including British Columbia. The federal Underused Housing Tax Act remains dormant on the books until a full statutory repeal takes effect on January 1, 2035. Critically, filing obligations and tax liability for the 2022, 2023, and 2024 tax years remain fully in force, and penalties and interest continue to accrue for non-compliance with those historical years. BC property owners with outstanding UHT obligations for 2022–2024 should confirm their position with a Canadian tax professional.

Despite the elimination of the UHT prospectively, any owner of BC residential property who was required to file UHT returns for the 2022, 2023, or 2024 tax years and has not yet done so remains legally obligated to file and, where applicable, pay the tax plus any accrued penalties and interest. This includes non-resident non-Canadians, certain Canadian-controlled private corporations, trustees of certain trusts, and partners of certain partnerships that held BC residential property during those years. The CRA is the administering authority, and the Underused Housing Tax Act governs those historical obligations. Confirm the specific filing deadlines and exemptions applicable to your situation with a Canadian tax professional.

The UHT is a separate federal tax under the federal Underused Housing Tax Act, while BC's Speculation and Vacancy Tax is a provincial tax administered under BC's Speculation and Vacancy Tax Act by the BC Ministry of Finance. Both taxes historically targeted vacant or underused residential properties, but they operated under different scopes, exemptions, ownership definitions, and geographic coverage — the BC Speculation and Vacancy Tax applies only in designated BC municipalities, whereas the UHT applied nationwide. For tax years 2022 through 2024, a BC property owner could potentially have been liable under both regimes simultaneously if they did not qualify for the relevant exemptions under each. Consulting a Canadian tax professional is important to assess obligations under each distinct regime.

Yes, ownership of a strata lot in a BC strata corporation — governed by the Strata Property Act (SBC 1998, c. 43) — did not exempt an owner from UHT obligations if the lot was a residential property and the owner was otherwise caught by the federal Underused Housing Tax Act for the 2022, 2023, or 2024 tax years. The Strata Property Act governs the internal governance of strata corporations, common property, and bylaws but has no authority over federal tax obligations such as the UHT. A non-resident non-Canadian owning a strata condo in Vancouver, for example, would have been required to assess their UHT filing obligation independently of the strata's governing documents. Historical UHT liability for strata lot owners should be reviewed with a Canadian tax professional.

Farmland within BC's Agricultural Land Reserve (ALR), administered by the Agricultural Land Commission under the Agricultural Land Commission Act (SBC 2002, c. 36), is subject to specific land-use restrictions, but the ALR designation itself does not automatically exempt a property from the federal Underused Housing Tax for the 2022–2024 tax years. Whether a residential structure on ALR land qualified for a UHT exemption depended on the federal criteria under the Underused Housing Tax Act, such as whether the property was used as a qualifying occupancy or met another prescribed exemption, not on provincial ALR rules. Owners of residential properties on ALR land in BC who may have had UHT obligations for those historical years should confirm their status with a Canadian tax professional. The ALC can be contacted directly for questions about ALR land use restrictions.

Yes, BC's Property Transfer Tax Act applies independently of the federal UHT whenever a taxable transaction — such as a sale or transfer of a residential property — occurs in British Columbia. PTT is calculated at 1% on the first $200,000 of fair market value, 2% on the portion from $200,001 to $3,000,000, 3% on the residential portion above $3,000,000, and an additional 2% applies to residential property over $3,000,000; a separate Additional Property Transfer Tax may apply to foreign entities under the PTT Act. The elimination of the UHT under Bill C-15 for 2025 onward has no effect on PTT obligations, which remain governed entirely by the BC Property Transfer Tax Act and administered by the BC Ministry of Finance. Buyers and sellers should review PTT obligations with a BC legal professional at the time of any transfer.

Penalties for failing to file a UHT return for the 2022, 2023, or 2024 tax years are set by the federal Underused Housing Tax Act and are administered by the CRA; because these are federal obligations, the specific penalty amounts are not governed by any BC statute. The Underused Housing Tax Act prescribed minimum flat penalties plus percentage-based additions for late or non-filing, and interest continues to accrue on unpaid amounts. BC property owners who have not yet met their 2022–2024 UHT filing obligations should consult the CRA directly or engage a Canadian tax professional to determine the precise penalties and interest applicable to their circumstances. The BCFSA and RESA do not govern these federal tax obligations.

BC real estate licensees are governed by the Real Estate Services Act (RESA) and its Rules, administered by the BC Financial Services Authority (BCFSA), which require licensees to act honestly, with reasonable care and skill, and to disclose known material latent defects — but UHT filing obligations are a federal tax matter personal to the property owner, not a defect or encumbrance on title that a licensee is typically positioned to assess. Licensees are not tax advisors and should not provide tax advice under RESA's professional conduct standards; instead, they should recommend that clients seek guidance from a Canadian tax professional regarding any outstanding UHT obligations for 2022–2024. A licensee who is aware that a seller has unresolved federal tax liabilities that could affect a transaction should encourage disclosure and professional tax advice, but the UHT obligation does not automatically register as a charge against title in BC's Land Title system. Buyers and sellers concerned about historical UHT exposure should obtain independent tax advice.

Yes, if a deceased person owned BC residential property during the 2022, 2023, or 2024 calendar years and was subject to the federal Underused Housing Tax Act, the estate may have outstanding UHT filing and payment obligations for those years, since the liability arose before death. Under BC's Wills, Estates and Succession Act (WESA), the executor or administrator of an estate is responsible for identifying and satisfying the deceased's legal liabilities — including tax debts — before distributing the estate to beneficiaries. Failure to account for UHT obligations before distribution could expose the executor to personal liability for unpaid federal taxes. Executors administering estates involving BC residential property held by non-resident or otherwise affected owners should confirm any historical UHT obligations with a Canadian tax professional as part of the estate administration process.