The Underused Housing Tax and Vacant Home Rules in York Region: What Still Applies

What the Underused Housing Tax Was

The UHT took effect on January 1, 2022 as an annual federal tax of 1% on the value of vacant or underused residential property. It was aimed mainly at foreign owners, but it also caught some Canadian owners, such as certain trustees, partners and corporations, who had to file an annual return even when no tax was owing.

Michael John Lau, a REALTOR® with the Kaizen Real Estate Team, one of the most active real estate teams in Markham and York Region, often meets families who hold a second property through a trust or partnership and are unsure whether they filed. This guide summarizes where things stand.

The Repeal: What Changed and What Did Not

On November 4, 2025, the federal budget proposed eliminating the UHT starting with the 2025 calendar year. According to a summary by Insights CPA, last updated September 2, 2026, the repeal was enacted through Bill C-15, which received royal assent on March 26, 2026.

Confirm the current status with the CRA or your accountant, since administrative guidance can change after new legislation.

Excluded Owners vs. Affected Owners

For 2022 in particular, many Canadian trustees and partners had filing obligations that were removed for later years. Families who held property in a trust or partnership in 2022 should check whether a return was filed.

Penalties and How to Fix a Missed Return

For a late or missing UHT return, the penalty is the greater of a minimum amount, $1,000 for individuals and $2,000 for others, or a percentage-based amount of 5% of the tax plus 3% for each complete month late. Those minimums were reduced from the original $5,000 and $10,000.

If you think a return was missed for 2022 to 2024, speak with an accountant about filing and whether the CRA’s Voluntary Disclosures Program may help before the CRA contacts you. Liability generally stays with the owner who held the property in those years, even after a sale.

Vacant Home Taxes in Ontario

Municipal vacant home taxes are separate from the federal UHT and were not affected by the repeal. As of a September 2026 summary, Ontario municipalities with vacant home taxes include Toronto (3% of assessed value), Ottawa (1%, rising for consecutive vacant years), Hamilton (1%) and Windsor. York Region council studied a vacant homes tax in 2023 and deferred a decision. York Region and Markham were not listed among municipalities with a vacant home tax in that summary.

If you own property in Toronto or another city with a vacant home tax, an annual declaration may be required even if you live there.

A Practical Checklist for Secondary Properties

1. List every residential property you held from 2022 to 2024 and how it was owned: personally, by a corporation, a trust or a partnership.
2. Check with your accountant whether any UHT returns were required and filed.
3. Keep records showing who lived in each property and when, such as leases, utility bills and mail.
4. Check municipal vacant home tax rules wherever you own property.
5. For non-residents, review the Ontario Non-Resident Speculation Tax and federal purchase restrictions before buying.

Ultimately, the decision is yours. The goal is to make sure you have all the information.

Other Rules That Still Apply to Non-Residents

The federal government pointed to other measures when it proposed ending the UHT. Two matter most for Markham buyers from outside Canada. Ontario’s Non-Resident Speculation Tax is a 25% tax on purchases of residential property by foreign nationals, foreign corporations and certain trusts, paid on purchase. The federal ban on purchases of residential property by non-Canadians, extended to January 1, 2027, restricts many foreign buyers outright, with some exceptions. Anyone outside Canada considering a purchase should get legal advice first.

Snowbirds and Extended Families

Snowbirds who are Canadian citizens and own their Markham home directly were generally excluded from the UHT. Families who bought homes for relatives living abroad, or who hold property through a family trust, are the ones most likely to have had filing questions. Non-resident buyers should also review ownership structures with an accountant before they buy.

Next Steps

• Request a free home evaluation: a current value for your records.
• Real estate investing in Markham: plan your next property.
• Corporation vs. personal name: ownership structures explained.

Work With Michael John Lau in Markham

Michael John Lau helps Markham owners of second properties make informed decisions about holding, renting or selling. He works alongside your accountant so tax questions are answered before you act. The goal is to protect your investment and avoid surprises.

📞 Contact Michael John Lau, REALTOR®
🌐 www.callmikelau.com

Michael John Lau, REALTOR® · Markham, Ontario · (416) 700-0286
Disclaimer. Michael John Lau is a licensed REALTOR® serving buyers and sellers in Markham, Ontario and the Greater Toronto Area. UHT information is from the CRA, Advisor.ca (November 2025) and Insights CPA (last updated September 2, 2026). Vacant home tax information is from MyChoice (updated September 24, 2026) and Global News (May 27, 2023). Confirm current rules with the CRA and your accountant. Michael John Lau is not a lawyer, accountant, tax advisor or mortgage professional. This article is general information, not legal, tax or financial advice. Speak with a qualified professional about your own situation.