Underused Housing Tax (Federal) and Vacant Unit Tax Declarations (City of Ottawa)

If you own a residential property in Canada, you may be subject to one or both of two different taxes designed to encourage property owners to make better use of their homes. These are the Vacant Unit Tax, administered by the City of Ottawa, and the Underused Housing Tax, administered by the Canada Revenue Agency (CRA).

Vacant Unit Tax Ottawa

The Vacant Unit Tax applies specifically to residential properties located in Ottawa. The deadline to submit your declaration is March 16th, 2023. If you have not already done so, we encourage you to submit your declaration online as soon as possible. If a declaration is not submitted, the City of Ottawa will assume it is vacant and add the tax to your property tax bill. The tax is 1% of the assessed value of the property.

We cannot assist with filing the declaration with the City of Ottawa but wish to remind you of the upcoming deadline of March 16th, 2023.

Underused Housing Tax

The Underused Housing Tax is a federal tax that applies to residential properties owned in all of Canada and is designed to encourage property owners to make better use of their residential properties. All corporations, trusts, and partnerships that own residential property in Canada are required to file an Underused Housing Tax Return with the Canada Revenue Agency. For trusts and partnerships, the trustees or partners on legal title for the entity would have the filing requirement.

The tax for failing to file a return is a minimum of $5,000 for individuals and $10,000 for corporations. The Underused Housing Tax Return is due April 30th, 2023.

We have reached out to clients potentially affected by the Underused Housing Tax rules. If you are a member of a partnership, trustee of a trust, or a corporation and you have not been contacted by our office and think you may be affected by these rules please contact your service provider at our firm. We would be able to assist with the filing of the return with the CRA.

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Hendry Warren LLP
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Ottawa ON, K1Z 5L3

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