Open Letter to Canadian MPs - Underused Housing Tax

Jerome Roth


Dear [name of your Member of Parliament]:

RE: Enforcement of the Underused Housing Tax Act, SC 2022, c 5, s 10

I am writing to you to express my concerns with the implementation of the Underused Housing Tax Act, SC 2022, c 5, s 10 (“UHTA” or the “Act”), namely, that the burden of enforcement falls on Canadian property owners.

The UHTA came into force on January 1, 2022 with the primary purpose to tax non-resident and non-citizen owners of vacant or underused (i.e. seasonal) residential properties. The Act imposes a 1% per annum tax on the value of applicable properties. In light of the current housing crisis in Canada, the Federal Government’s efforts to discourage vacant and underused residential properties are laudable. The issue with the current legislation, however, is the financial and administrative burden placed on Canadian property owners for the enforcement of the UHTA. 

Under the UHTA scheme, the Canada Revenue Agency considers property owners as either “excluded owners” or “affected owners”.[1] The “excluded owners” – generally individual Canadian citizens or permanent residents – are not required to pay the underused housing tax or file any forms. “Affected owners” is a broad term which includes the non-citizen and non-resident owners, but also could include:

  • Canadian family members who jointly own property and may be deemed a “partnership”;
  • Properties held in certain trusts, including a family trust, where all parties are Canadian; and
  • Canadian-controlled corporations.

The type of property owners listed above are all exempt from the tax, however, as “affected owners” they are required to prepare and file form UHT 2900 Underused Housing Tax Return and Election Forms annually. These forms are complex and, in most cases, require the “affected owners” to retain the services of a tax professional to file. If “affected owners” fail to file these forms, they may be subject to a non-filing penalty of $5,000 per individual owned property and $10,000 per corporate owned property.

In the 2022 assessment year, tax professionals have observed many Canadian property owners falling into the ambiguous “affected owners” category, disproportionate to the intended non-citizen and non-resident property owners who are subject to the tax. These Canadian property owners that are deemed “affected owners” face a high financial and administrative burden to comply with the Act. The UHTA scheme has essentially passed off the cost of enforcement onto these Canadian property owners who are not subject to the tax. Many Canadian small business owners face these same burdens as “affected owners” of residential property. The Canadian Revenue Agency has published a Taxpayer Bill of Rights that includes a Commitment to Small Business in part:

Commitment to Small Business

  1. The Canada Revenue Agency (CRA) is committed to administering the tax system in a way that minimizes the costs of compliance for small businesses.
  2. The CRA is committed to working with all governments to streamline service, minimize cost, and reduce the compliance burden.

The UHTA introduces new compliance costs and burdens on many Canadian small businesses, which are not the object of the Act or subject to the tax.

The enforcement of the UHTA is inconsistent with the purpose of the Act. I ask that you raise the concerns set out in this letter with the Minister of Finance, the Canada Revenue Agency, and the Government of Canada. Amendments to the UHTA that would reduce the financial and administrative burden on Canadian property owners could include expanding the prescribed exclusions to capture Canadian partnerships, Canadian-controlled trusts, and Canadian-controlled corporations as “excluded owners” rather than “affected owners”.

Please feel free to contact me if you need any further information, and I look forward to hearing from you on this issue.


[your name]



Earl Dreeshen, Red Deer - Mountain View, AB earl.dreeshen(at)

Blaine Calkins, Red Deer - Lacombe, AB blaine.calkins(at)

Chrystia Freeland, University - Rosedale, ON (Minister of Finance) chrystia.freeland(at)

Justin Trudeau, Papineau, QB (Prime Minister) justin.trudeau(at)

Email addresses for all other Members of Parliament

[1] Underused Housing Tax Notice UHTN1, Canada Revenue Agency, May 2023, Introduction to the Underused Housing Tax

Posted: 11/2/23