Canadian Federal Budget 2025 Ends Underused Housing Tax (UHT): A timely overview for short-term and mid-term rentals
Welcome news for furnished monthly rental properties; reporting and tax regulations have been eliminated for 2025 onward.
Passed on November 17, 2025 as part of the budget, this change included major, positive news for property owners across Canada: the federal Underused Housing Tax (UHT) regulations are eliminated from the 2025 calendar year onward.
While the Underused Housing Tax Act was designed to target vacant or underused properties owned by non-residents and non-Canadians, it caught many domestic property owners by surprise. The result? Unnecessary red tape has been eliminated for property owners previously classified as 'affected owners' (e.g., bare trusts and partnerships).
How does the change to the underused housing tax affect me?
For 2025 and onward:
No UHT will be payable
No UHT paperwork (Form UHT-2900) needs to be filed
As a furnished rental property owner you should still:
Ensure full compliance with past years' rules, from 2022-2024. If you haven't filed, or you're not sure if you need to, consult with a qualified tax professional.
Confirm that a UHT return (Form UHT-2900) has been filed for every property you owned where the owner was designated an Affected Owner. This includes all properties owned through a bare trust and all properties owned by a private corporation.
What exemptions apply to me?
For past years (2022-2024), if you rented your furnished property for monthly stays (30 or more consecutive days) for at least 180 days per year, your property is considered exempt and would therefore owe $0.00 in tax under the definition of a "Qualifying Occupancy".
However, as an "affected owner" you still had to file Form UHT-2900 annually for each property. Missing the deadline triggered mandatory penalties—regardless of owing no tax:
Individual Owners: $1,000 per property, per year
Corporation/Trust/Partnership Owners: $2,000 per property, per year
For hosts providing monthly rentals that actively contribute to housing supply, this created a frustrating administrative burden with real financial risk, despite owing no actual tax.
Review your UHT Filing Requirements for 2022, 2023, and 2024
While the future is simpler, past filing obligations haven't disappeared.
The federal government has confirmed that all UHT requirements, penalties, and interest still apply for the 2022, 2023, and 2024 calendar years.
If you were an affected owner during any of these years and haven't filed your UHT returns, you're still exposed to mandatory penalties.
UHT Filing Deadlines
2022: Deadline was extended to April 30, 2024
2023: Deadline was April 30, 2024
2024: Deadline was April 30, 2025
2025 filing is no longer required
Bottom line: If you have any outstanding returns for 2022, 2023, or 2024, you need to address them now.
Was the Underused Housing Tax Act repealed?
No. The Act is in place until January 1, 2035. Only the regulations related to the Underused Housing Tax Act were eliminated.
Key Changes to the UHT Since 2022
Legislative change (effective 2023): Amendments lowered fines and reclassified Specified Canadian Corporations, Partnerships, and Trusts from "Affected Owner" to "Excluded Owner"
Practical impact: The majority of Canadian-owned private entities were no longer required to file the UHT return for 2023 and 2024
Key exception: Bare trust structures generally remained an "Affected Owner" and were still required to file for all years up to 2024
Resources and Support for Furnished Rental Hosts
With the UHT filing burden lifted for 2025 and beyond, furnished rental property owner-operators can focus on what matters: connecting with quality guests and maintaining your property.
If you're looking for monthly furnished rentals in BC, Vancouver Short Stay is ready to help. As an innovative Canadian leader and highly trusted platform, we connect property owners with guests and corporate professionals seeking monthly stays.
Focused: We produce a smooth experience, trusted by hosts and guests since 2001.
Specific Guidance: Guidance specific to your exact location, property type, and regulatory requirements.
Comprehensive Support: Detailed hosting resources, depth of rental industry experience, operational best practices, and hands-on assistance when and as you need it.
Further Information
Sources: Budget 2025, Notice of Ways and Means Motion to amend the Underused Housing Tax Act and a Related Text, Canada Revenue Agency's Underused Housing Tax Page
This article is for informational purposes only and does not constitute tax or legal advice. Property owners should consult with qualified tax professionals regarding their specific situations.