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Who must file a return and pay the tax

You must file an Underused Housing Tax (UHT) return for each of your properties in Canada for which all of the following conditions are met on December 31:

  • The property is a residential property for UHT purposes
  • You are an owner of the residential property
  • You are determined to be an affected owner of the residential property

Affected owner

As an affected owner, you must file an annual return.

You will also have to pay the tax unless you qualify for an exemption.

If you are an affected owner of more than one residential property in Canada, you must file a separate return for each property.

If you are one of several affected owners of the residential property, each of you must file a separate return for the property.

Determine the type of owner you are

Excluded owner

Generally, Canadian owners of residential property are excluded owners.

If you are an excluded owner you do not have to:

  • File a return
  • Pay the tax

Determine the type of owner you are

If you are an owner in more than one capacity

Under proposed changes to the UHT legislation, starting with the 2022 calendar year, if you own the residential property in more than one capacity you would be treated as a separate person for each of your ownership capacities, if one of those capacities is either:

  • A partner of a partnership,
  • A trustee of a trust

You may be an affected owner in one capacity, but an excluded owner in another.

You may need to amend a return you previously filed and file additional new return(s) for a residential property for the 2022 calendar year if:

  • You determine that you needed to file multiple returns based on your ownership capacities

  • You filed only one return for all ownership capacities

Review tax notice: UHTN16, Ownership in multiple capacities

Residential property

Generally, residential property is defined as property that is either:

  • A detached house or similar building that contains a maximum of 3 dwelling units, including the related land
  • A semi-detached house, rowhouse unit, or residential condominium unit, including the related land

Owner

You are an owner of residential property if you are:

  • Identified as, or considered to be, an owner of the residential property in the land registration system where the residential property is located
  • A life tenant under a life estate in the residential property
  • A life lease holder of the residential property
  • A lessee that has continuous possession of the land on which the residential property is situated under a long-term lease

Review tax notice: UHTN1, Owner of residential property

Partner of a partnership

For UHT purposes, in all parts of Canada (other than Quebec), the CRA interprets the term partnership to mean the relationship that exists between persons carrying on a business in common with a view to profit.

Partnerships constituted in Quebec

For partnerships constituted in Quebec, the CRA interprets the term partnership based on the legal definition of contract of partnership in the Civil Code of Quebec:

“A contract of partnership is a contract by which the parties, in a spirit of cooperation, agree to carry on an activity, including the operation of an enterprise, to contribute thereto by combining property, knowledge or activities and to share among themselves any resulting pecuniary profits”

The fact that two people own a property together does not, of itself, create a partnership.

A familial relationship between two or more people who own a residential property does not, of itself, create a partnership, regardless of whether they are related by:

  • marriage
  • a common-law partnership (for example, two individuals who cohabit in a conjugal relationship throughout a continuous 12-month period)
  • a blood relationship (for example, a parent and a child; a brother and a sister)
  • adoption

Review tax notice: UHTN15, Questions about partnerships

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