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The deadline for filing taxes in Canada for 2026 is April 30. As the big day approaches, Globe Advisor and Globe Investor have teamed up to offer advice on how to maximize returns, find credits and avoid an audit. The full series can be found here.
The Carney government has eliminated a controversial federal tax on underused or vacant homes, but many homeowners still have to navigate versions of the levy depending on where they live.
The federal Underused Housing Tax (UHT) was introduced by the Trudeau government to ensure that housing stock wasn’t tied up by investors leaving properties empty. It charged a 1-per-cent tax on the value of an affected home.
Since its 2022 introduction, the tax has been widely criticized. Thousands of Canadians were required to submit paperwork, and the overwhelming majority of people who were required to file didn’t have to pay any tax. This created an administrative burden that generated little revenue for the Canada Revenue Agency.
“There was a fair amount of backlash from Canadian residents and corporations because of the level of compliance that was required,” said Stefanie Ricchio, a chartered professional accountant and spokesperson for TurboTax Canada, adding that the changes around the UHT are a result of its administrative burden on Canadians.
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The tax still applies for the 2022-2024 tax years, however.
The new rules, which became law last week when the Senate granted royal assent to the budget implementation act, mean most Canadians will be exempt from the UHT and won’t be required to file paperwork for it. Ms. Ricchio said that foreign nationals and corporations that are not incorporated in Canada are among the few still required to file for UHT.
However, given that some municipalities and provinces have their own UHT rules, it’s imperative to check if the region where you own your home has a form of UHT, and whether a declaration is required.
Ms. Ricchio said one thing that most municipal and provincial UHTs have in common is that they start charging homeowners when a property has been vacant for more than six months in a year.
If you don’t declare, some cities – such as Hamilton – may consider your home vacant and add the tax. Others will charge you for a late declaration. Yannick Lemay, an H&R Block tax expert, noted exemptions may apply in cases such as illness or major renovations.
Here’s what else you need to know about these regional policies.
British Columbia
B.C.’s version of the UHT is called the Speculation and Vacancy Tax, and it’s notable because the province recently announced that it is raising the amount it will tax in 2026.
The tax level stands at 2 per cent for the 2025 tax year, and Mr. Lemay said it will increase to 3 per cent for 2026. Homeowners are required to complete a declaration of their home’s status by March 31.
Late payments incur a 10-per-cent penalty plus accrued interest.
The province also offers a non-refundable tax credit of up to $4,000 for people affected by the province’s vacancy tax, an increase from $2,000 in previous years. Ms. Ricchio said this helps offset overlapping municipal, provincial and federal taxes. Foreign buyers are not eligible for the tax credit.
Vancouver
Vancouver‘s Empty Homes Tax makes the city a unique jurisdiction where individuals could face an underused housing tax on the federal, provincial and municipal levels.
Underused homes are taxed at 3 per cent of a property’s assessed value, and the declaration deadline for this tax this year was Feb. 3. A late payment will result in a 5-per-cent fee on the levied amount.
Introduced in 2017, Vancouver’s Empty Homes Tax was designed to address housing affordability.
Toronto
Toronto is one of multiple Ontario cities that imposes their own tax, called the Vacant Home Tax.
Homeowners are required to declare whether their home was vacant or occupied for the 2025 tax year by April 30.
Toronto charges 3 per cent of the property’s assessed value as determined by the Municipal Property Assessment Corporation.
Exemptions for homeowners apply in cases such as principal residents in care, extensive repairs or major renovations.
Ottawa
Ottawa’s Vacant Unit Tax is unique because it has a graduated fee structure that grows with every consecutive year that a property is left vacant.
The tax starts at 1 per cent of a unit’s value, and it increases by 1 per cent each year that a property remains vacant, to a maximum cap of 5 per cent. The declaration deadline was March 19.
Hamilton
Hamilton also charges 1 per cent of a property’s assessed value for its Vacant Unit Tax. The deadline for declaration is April 15, and a late fee of $250 will be charged for declarations made up to May 15.
After May 15, the city’s website states that a home will be automatically considered vacant and the 1-per-cent tax will be charged.
The city reported that 2.5 per cent of homes either declared that they were vacant or were deemed vacant by the city for the 2024 tax year.
Prince Edward Island and Nova Scotia
These two Maritime provinces don’t have formal vacancy taxes, but they do charge higher tax rates for non-resident owners.
In Nova Scotia, Ms. Ricchio says non-residents are charged in a tiered system that ranges from 0.5 per cent to 2 per cent for homes with a value above $150,000. Vacant homes are charged a flat 2-per-cent rate.
In PEI, non-resident property owners are also charged higher rates that vary between municipalities.
