Consultation on Underused Housing Tax

Current status: Closed

In Budget 2021 the government announced its intention to implement a national, annual 1 per cent tax on the value of non-resident, non-Canadian owned residential real estate that is considered to be vacant or underused, effective January 1, 2022.

This engagement process gave stakeholders, as well as interested members of the public, the opportunity to provide the Department of Finance with feedback on the design of the proposed Underused Housing Tax (UHT). The consultation ran from August 6, 2021 to December 2, 2021. Thank you to everyone who participated.

Key considerations

Full details on the government’s proposed approach that served as the basis for this consultation can be found in the technical background paper. The following design aspects were among those considered:

• the definition of "residential property;"
• the definitions of "owner" of residential property and "interest" in residential property;
• the value on which the tax would apply;
• "excluded owners" in respect of which the tax would not apply;
• exemptions from the tax;
• the annual declaration requirement and the consequences of failing to file the declaration; and
• whether special rules should be established in respect of residential properties located in smaller, resort and tourism communities, and if so, what those rules should be.

What's next?

Feedback received through this consultation will be considered alongside the analysis departmental officials are conducting to help inform decisions on the design of the UHT. While this formal consultation has now concluded, Canadians are welcome to share their ideas and comments with the Department of Finance at any time.

Related links

• Department of Finance launches consultations on proposed Underused Housing Tax
• Budget 2021: Tax on Unproductive Use of Canadian Housing by Foreign Non-Resident Owners