UHT-2900 - Underused Housing Tax Return

UHT-2900 - Underused Housing Tax Return

Additional information

For comprehensive definitions, interpretations, and general rules of application for the Underused Housing Tax (UHT), go to canada.ca/cra-uht. The information in this publication does not replace the law found in the UHTA.

What is the UHT?

The UHT, which took effect on January 1, 2022, is a tax on the ownership of vacant or underused residential properties that are situated in Canada.

Starting with the 2022 calendar year and for each following calendar year, owners of residential properties that are situated in Canada have to determine if they have to file UHT returns and pay the UHT on their residential properties.

Who has to file a UHT return?

Persons who, on December 31 of a calendar year, are affected owners of residential properties that are situated in Canada have to file a UHT return for each residential property, situated in Canada, that they own. If you own a residential property in more than one capacity, you have to file a UHT return for each capacity in which you are an affected owner of the residential property.

Persons who, on December 31 of a calendar year, are excluded owners of residential properties that are situated in Canada do not have to file UHT returns.

Who has to pay the UHT?

Persons who, on December 31 of a calendar year, are affected owners of residential properties that are situated in Canada, have to pay the UHT on each residential property situated in Canada that they own unless their ownership of a particular residential property is exempt for the calendar year.

All of the UHT exemptions are outlined in Parts 4, 5, and 6 of this return. For a more comprehensive explanation of these exemptions, go to canada.ca/cra-uht.

Persons who, on December 31 of a calendar year, are excluded owners of residential properties that are situated in Canada do not have to pay the UHT on their residential properties.

Authorized person or legal representative

In the case of an owner who is not an individual, Part 9 of the return must be filled out by an individual who has been duly authorized by the owner.

In the case of an owner who is an individual, Part 9 must be filled out by the individual or a legal representative of the individual who has authority according to a legal document that is sufficiently broad to cover acting on behalf of the individual in connection with this return.

For more information, go to canada.ca/taxes-representative-authorization and select "Legal representative".

Filing and tax payable due dates

You must file your UHT return for a calendar year on or before April 30 of the following calendar year. If April 30 falls on a Saturday, Sunday, or a public holiday recognized by the CRA, your return is due on the next business day.

You must pay all UHT owing for a residential property, for a given calendar year, to the Receiver General on or before April 30 of the following calendar year. If April 30 falls on a Saturday, Sunday, or a public holiday recognized by the CRA, your payment is due on the next business day.

Payments

If an amount of UHT owing is less than $50,000, you can attach a cheque or money order to your UHT return. You can also pay amounts of less than $50,000 owing electronically. For more information on how to make your payment, go to canada.ca/payments.

For amounts owing that are $50,000 or more, you must make your payment through an accepted financial institution.

Keeping records

If you are required to file a UHT return for a calendar year (even if there is no UHT owing), you must keep records related to the determination of your liabilities and obligations under the UHTA. If you do not keep adequate records to support that your ownership of a residential property is exempt from UHT for a calendar year, the CRA may reject your claim for exemption. Unless otherwise authorized by the Minister, a record must be kept in Canada in English or in French.

You must keep these records for a minimum of six years after the end of the calendar year to which they relate.

Penalties

If you do not file your UHT return for a residential property for a calendar year by April 30 of the following calendar year, you have to pay a penalty that is the greater of the two following amounts:

$1,000 for affected owners that are individuals or $2,000 for affected owners that are not individuals (such as corporations)
the amount that is the total of:
- 5% of your UHT payable for the residential property for the calendar year
- 3% of your UHT payable for the residential property for the calendar year, multiplied by the number of complete calendar months that the return is past due

If a UHT return for a calendar year is not filed by December 31 of the following year, the determination of UHT payable for the residential property for the calendar year for purposes of calculating the late-filing penalty (as shown in the second bullet above) will be made without the benefit of the following exemptions:

exemption in Part 4 of this return
exemption in Part 5 of this return
exemptions on lines 630, 635, 640, 645, and starting with the 2023 calendar year, line 680 in Part 6 of this return

Interest

If you do not pay an amount of UHT owing for a calendar year to the Receiver General by April 30 of the following calendar year, interest will be calculated and added to that amount.

Interest will be compounded daily at the specified rate, calculated starting on the first day after the day on or before which the amount was required to be paid and ending on the day the amount is paid.

Multiple residential properties rules and election

Generally, the exemptions for primary place of residence (Part 4 of this return) and qualifying occupancy (Part 5, lines 530 and 540 of this return) are intended for the personal occupancy of a residential property by an affected owner or certain members of their family. Each of the exemptions includes specific situations where the personal occupancy of the residential property by the affected owner or certain members of their family qualifies for exemption.

However, an affected owner cannot qualify for either of the two exemptions for their (or their spouse's or common-law partner's) personal occupancy of more than one residential property. Therefore, a special rule deals with the two exemptions when the affected owner (or the affected owner and their spouse or common-law partner together) has multiple residential properties.

If you are an affected owner, the special rule applies to you for a calendar year if all of the following conditions are met on December 31 of the calendar year:

you are an individual who is neither a Canadian citizen nor a permanent resident of Canada, and are an owner of a particular residential property;
either (or both) of these apply:
- you are an owner of one or more other residential properties
- your spouse or common-law partner, who is neither a Canadian citizen nor a permanent resident of Canada, is an owner of one or more other residential properties

Depending on the ownership of the multiple residential properties, you alone may file an election, or you and your spouse or common-law partner together may file a joint election, to designate one of the multiple residential properties for the exemptions for the calendar year.

By designating that one residential property in the election, you are declaring all of the following:

only that one residential property can be considered as qualifying for the exemption for primary place of residence
for only that one residential property can your personal occupancy of a dwelling unit, or the personal occupancy of your spouse or common-law partner, be considered as usable for the exemption for qualifying occupancy (only for the qualifying occupants in lines 530 and 540)

Use Part 3 to make this election.

Note: The election in Part 3 does not impact your eligibility to the exemptions at lines 510, 520, and 540 (only for a Canadian parent or child). You may still be eligible for these exemptions without designating the residential property described in Part 2.

Where to send your UHT return

If you are an individual who lives in or a corporation located in:

USA, United Kingdom, France, Netherlands or Denmark
Alberta, British Columbia, Manitoba, Saskatchewan, Northwest Territories, Nunavut or Yukon
the following places in Ontario: anywhere except Barrie, Sudbury or Toronto

Send your UHT return to:

Winnipeg Tax Centre
Post Office Box 14001,
Station Main
Winnipeg MB R3C 3M3
Canada
Fax: 204-984-5164

If you are an individual who lives in or a corporation located in:

countries other than the USA, United Kingdom, France, Netherlands or Denmark
New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island or Quebec
the following places in Ontario: Barrie, Sudbury or Toronto

Send your UHT return to:

Sudbury Tax Centre
1050 Notre Dame Avenue
Sudbury ON P3A 5C2
Canada
Fax: 705-671-3994 and 1-855-276-1529

Definitions

Affected owner

An administrative term that the CRA uses to refer to a person who is an owner of a residential property, but who is not an excluded owner of the residential property.

Assessed value

The assessed value in respect of a residential property means the value established by an authority that has the power under Canadian federal or provincial law to establish the assessed value of property for the purposes of calculating a property tax and refers to the full assessed value of the parcel of real or immovable property, of which the residential property is the whole or a part, as stated in the property assessment notice (or similar document) issued by the authority that establishes real or immovable property values in the area where the residential property is located.

Continuous occupancy

Generally, if an individual has the right to occupy a dwelling unit for a period on a continuous basis (without interruption throughout the period), the individual has continuous occupancy of the dwelling unit for the period as found in section 6 of the UHTA. An individual's continuous occupancy is not necessarily interrupted by the individual's physical absence from the dwelling unit at a time in the period if it meets all of the following conditions:

the individual still has the right to occupy the dwelling unit throughout their physical absence
the right to occupy the dwelling unit is not given to another individual for any part of the physical absence

Dwelling unit

A dwelling unit is a residential unit that contains private kitchen facilities, a private bath, and a private living area.

Generally, a residential unit is a single self-contained set of rooms, in a building or part of a building, that is distinguished from any other such set of rooms in the building or part of the building and that is characteristic of, and suitable as, a residence.

Eligible area

An administrative term that the CRA uses to refer to any of the following locations in which your residential property is located:

outside both a census metropolitan area and a census agglomeration
inside a census agglomeration having a total population of less than 30,000 residents
inside a census metropolitan area or a specified census agglomeration, but outside a population centre that is part of such an area or agglomeration

A specified census agglomeration has a total population of 30,000 or more residents.

Excluded owner (2023 definition)

In the 2023 and subsequent calendar years, you are an excluded owner of a residential property in Canada if you are any of the following on December 31 of the calendar year:

an owner of a residential property in your capacity as a trustee of any of the following trusts:
- a specified Canadian trust (new excluded owner, starting with the 2023 calendar year)
- a mutual fund trust for Canadian income tax purposes
- a real estate investment trust (REIT) for Canadian income tax purposes
- a specified investment flow-through (SIFT) trust for Canadian income tax purposes
an owner of a residential property in your capacity as a partner of a specified Canadian partnership (new excluded owner, starting with the 2023 calendar year)
an owner of a residential property in a capacity other than as a trustee of a trust or partner of a partnership if you are:
- an individual who is a Canadian citizen or permanent resident of Canada
- a specified Canadian corporation (new excluded owner, starting with the 2023 calendar year)
- a Canadian corporation whose shares are listed on a Canadian stock exchange designated for Canadian income tax purposes
- a registered charity for Canadian income tax purposes
- a cooperative housing corporation, hospital authority, municipality, para-municipal organization, public college, school authority, or university for GST/HST purposes
- an Indigenous governing body
- the government of Canada or a province, or an agent of the government of Canada or a province
- a Canadian corporation whose shares are substantially owned or controlled by a mutual fund trust, a REIT, a SIFT trust, or by a Canadian corporation whose shares are listed on a Canadian stock exchange designated for Canadian income tax purposes (new excluded owner, starting with the 2023 calendar year)
an individual who is a Canadian citizen or permanent resident of Canada and is an owner of the residential property as a personal representative of a deceased individual

For a list of persons who are excluded owners for the 2022 calendar year, refer to the Underused Housing Tax Notice UHTN1 at canada.ca/en/revenue-agency/services/forms-publications/publications/uhtn1.html.

Fair market value

Generally, fair market value is the highest price, expressed in terms of money or money's worth, obtainable in an open and unrestricted market between knowledgeable, informed, and prudent parties that are acting at arm's length, neither party being under any compulsion to transact.

Fair rent

Fair rent is the amount that is 5% of the taxable value of the residential property for the calendar year.

Owner

You are an owner of a residential property if you are any of the following:

identified as an owner of the residential property in the land registration system where the residential property is located
considered an owner of the residential property based on such a land registration system
a life tenant under a life estate in the residential property
a life lease holder of the residential property
a lessee who has continuous possession of the land, on which the residential property is situated, under a long-term lease

You are not an owner of a residential property if you give continuous possession of the land, on which the residential property is situated, to either of the following:

a life lease holder of the residential property
a lessee under a long-term lease

Ownership percentage

If you are an affected owner of a residential property on December 31 of a calendar year, your ownership percentage of the residential property for the calendar year is determined as follows:

if you are the only owner of the residential property, your ownership percentage of the residential property is 100%
if you are one of several owners of the residential property, your ownership percentage of the residential property is either of the following:
- the percentage of your ownership as indicated in the land registration system
- 100% divided by the number of owners, if no percentage is indicated in the land registration system

Primary place of residence

Generally, if you have more than one place of residence, the place of residence that is first in order of importance to you is your primary place of residence. A place of residence that is not first in order of importance to you is a secondary place of residence. For example, a secondary place of residence may be one that is used mainly for recreational purposes or that is occupied less often than another residence. If you are neither a Canadian citizen nor a permanent resident of Canada and your primary place of residence is outside Canada, any residential property that you own in Canada will generally be considered to be a secondary place of residence, unless you can prove otherwise.

There are special rules for owners and their spouses or common-law partners who own multiple residential properties. For more information, see the multiple residential properties rules and election section.

Qualifying occupancy period

If you are an affected owner of a residential property on December 31 of a calendar year, your ownership of the residential property may be exempt from the UHT for the calendar year if at least 180 days in the calendar year are included in one or more qualifying occupancy periods for your ownership of the residential property.

A qualifying occupancy period is a period of at least one month in a calendar year during which one of the following qualifying occupants has continuous occupancy of a dwelling unit that is part of the residential property:

an individual who deals at arm's length with you and with your spouse or common-law partner (if you have one) and who is given continuous occupancy of the dwelling unit under an agreement evidenced in writing (such as a lease agreement)
an individual who does not deal at arm's length with you or with your spouse or common-law partner (if you have one) and who is given continuous occupancy of the dwelling unit under an agreement evidenced in writing for consideration that is not below the fair rent for the residential property, prorated for the period
an individual who is the owner or the owner's spouse or common-law partner, who is in Canada for the purpose of pursuing authorized work under a Canadian work permit and who occupies the dwelling unit in relation to that purpose
an individual who is a spouse, common-law partner, parent, or child of the owner and who is a Canadian citizen or permanent resident of Canada

If you are an affected owner who is an individual, and the only qualifying occupants who have continuous occupancy of a dwelling unit are you, or your spouse, common-law partner, parent, or child, you cannot include a calendar month in a qualifying occupancy period if each of these individuals occupies a place other than the residential property for an equal or greater number of days than the number of days that they occupy the residential property.

Residential property

Generally, for purposes of UHT, residential property is property situated in Canada that is either of the following:

a detached house or similar building that contains not more than three dwelling units, along with any appurtenances and the related land
a semi-detached house, rowhouse unit, residential condominium unit (other than a prescribed residential condominium unit described in section 1.1 of the Underused Housing Tax Regulations) or other similar premises, along with any common areas or appurtenances and the related land

Related land refers to the land that is subjacent or immediately contiguous to a residential building and that is reasonably necessary for its use and enjoyment as a place of residence for individuals. Generally, up to a half hectare of land that is subjacent and immediately contiguous to a residential building is considered to be reasonably necessary for the building's use and enjoyment as a place of residence for individuals.

Specified Canadian corporation

A specified Canadian corporation, in respect of a calendar year, means a corporation that is incorporated or continued under the laws of Canada or a province other than a corporation that is, on December 31 of the calendar year:

a corporation in respect of which any of the following persons have ownership or control, directly or indirectly, of shares of the corporation representing 10% or more of the value of the equity in the corporation or carrying 10% or more of the voting rights under all or under some circumstances:
- an individual who is neither a Canadian citizen nor a permanent resident of Canada
- a corporation that is incorporated or continued otherwise than under the laws of Canada or a province
- any combination of individuals or corporations referred to above
a corporation without share capital having either of the following:
- a chairperson or other presiding officer who is neither a Canadian citizen nor a permanent resident of Canada
- 10% or more of its directors who are neither Canadian citizens nor permanent residents of Canada

Specified Canadian partnership (2023 definition)

In the 2023 and subsequent calendar years, a partnership is a specified Canadian partnership for a calendar year if on December 31 of the calendar year each member is:

a person referred in the third bullet of the 2023 definition of excluded owner
another partnership, each member of which is a person referred to in the third bullet of the 2023 definition of excluded owner
a trust, each beneficiary of which is a person referred to the third bullet of the 2023 definition of excluded owner
a mutual fund trust, REIT or SIFT trust for Canadian income tax purposes

For information about a partnership that is a specified Canadian partnership for the 2022 calendar year, refer to Underused Housing Tax Notice UHTN4 at canada.ca/en/revenue-agency/services/forms-publications/publications/uhtn4.html.

Specified Canadian trust (2023 definition)

In the 2023 and subsequent calendar years, a trust is a specified Canadian trust for a calendar year if on December 31 of the calendar year each beneficiary is:

a person referred in the third bullet of the 2023 definition of excluded owner
a partnership, each member of which is a person referred to in the third bullet of the 2023 definition of excluded owner
another trust, each beneficiary of which is a person referred to the third bullet of the 2023 definition of excluded owner
a mutual fund trust, REIT or SIFT trust for Canadian income tax purposes

For information about a trust that is a specified Canadian trust for the 2022 calendar year, refer to Underused Housing Tax Notice UHTN4 at canada.ca/en/revenue-agency/services/forms-publications/publications/uhtn4.html

Taxable value

The taxable value of a residential property for a calendar year is the greater of the two following amounts:

the assessed value in respect of the residential property
the residential property's most recent sale price on or before December 31 of the calendar year