It's official: the federal UHT is over. Bill C-15, the Budget 2025 Implementation Act, No. 1, received Royal Assent on 26 March 2026. The Underused Housing Tax Act now says no tax is payable, and no return is required, for 2025 and later calendar years (Justice Laws). The Act itself will be repealed once the remaining repeal provision comes into force. Filings and penalties for 2022 to 2024 still apply.
Local vacancy taxes still bite
The federal repeal does not touch provincial or municipal vacancy taxes (Globe and Mail). For non-resident owners, the main ones include:
- British Columbia's Speculation and Vacancy Tax. The Globe reports a 2% rate for the 2025 tax year, rising to 3% for 2026; confirm with the province which rate applies to a given owner. Owners in designated areas must file a declaration every year, even if exempt.
- City vacancy taxes. Toronto's Vacant Home Tax and Vancouver's Empty Homes Tax require annual declarations, with charges for properties that are vacant or not declared. Rates and rules change; check each city's current rules.
Why lenders should care
Vacancy taxes can be added to property tax arrears, and property tax arrears generally rank ahead of a mortgage (Article 17). A vacant, foreign-owned property can quietly build up a priority claim.
Your checklist
- Confirm 2022–2024 federal UHT filings for non-Canadian borrowers
- Confirm BC SVT and city vacancy declarations are filed each year
- Monitor property tax accounts for added vacancy charges
This content is general information for industry professionals and is not legal, tax or financial advice. Laws change and apply differently to each transaction; obtain advice from qualified counsel in each relevant jurisdiction. Legal counsel to the Cross-Border Private Lenders Association: Jasmine Daya & Co. Questions: info@cbpla.com