The Underused Housing Tax is Gone: What Canmore Owners Still Owe

The underused housing tax is no longer payable. Budget 2025 Implementation Act, No. 1 received Royal Assent on 26 March 2026 and ended the tax for the 2025 calendar year and every year after it, so no return and no 1% charge arises from 2025 onward. What did not change is the past. Returns, exemptions and penalties for 2022, 2023 and 2024 still stand, and where a required return was never filed the Canada Revenue Agency has no deadline to assess it. That gap between the headline and the paperwork is where Bow Valley owners are getting caught.

Is the underused housing tax still in effect in 2026?

No. There is no filing obligation and no tax for 2025, 2026 or any later calendar year. Division 2 of Part 3 of Budget 2025 Implementation Act, No. 1 amended the Underused Housing Tax Act to end the tax in respect of 2025 and subsequent calendar years, and the bill received Royal Assent on 26 March 2026. The CRA's own notice UHTN16 puts it plainly: affected owners do not need to file a return or pay the tax for 2025 and subsequent years.

Two details are missing almost everywhere else. First, the Act is not gone. Sections 169 and 170 of the implementing legislation repeal both the Underused Housing Tax Act and the Underused Housing Tax Regulations on 1 January 2035, and that nine-year runway exists so the CRA can still assess, hear objections and collect on the years that remain open. Second, several federal pages still describe the tax as though it were live, because the obligations they describe were never withdrawn for 2022 to 2024.

Royal Assent

26 March 2026

Budget 2025 Implementation Act, No. 1 (Bill C-15)

First year with no UHT

2025

And every calendar year after it

Act repealed

1 January 2035

Sections 169 and 170 of that Act

Years still filable

2022, 2023, 2024

No assessment time limit if never filed

What the underused housing tax was, and who had to file

An annual federal charge of 1% of a residential property's taxable value, in force from 1 January 2022, aimed at housing held by non-residents and left vacant or underused. The Act's formula is simply 1% multiplied by the taxable value multiplied by the owner's percentage of ownership, with an election available to substitute an appraised fair market value.

Everything turned on one distinction. An excluded owner filed nothing. An affected owner filed Form UHT-2900 for every property, in every ownership capacity, by 30 April of the following year, whether or not any tax was actually due.

The last two lines are the ones that caught Canadian families, alongside the foreign nationals covered in our guide to non-resident buyers in Canmore. A Bow Valley condo held through a private company or a family trust generated a return every year even when the tax owing was nil.

What changed: Budget 2025, Royal Assent and the 2035 repeal date

It took just over a year to unwind, from a line in the federal budget to Royal Assent on 26 March 2026, and the wind-down was deliberately staged so the old years stay enforceable long after the tax stops being charged. Here is the sequence.

1. 1Budget 2025 proposes eliminationThe federal budget describes the tax as inefficient, with compliance costs out of proportion to revenue, and proposes ending it.
2. 2Bill C-15 tabledDivision 2 of Part 3 of Budget 2025 Implementation Act, No. 1 carries the amendments to the Underused Housing Tax Act.
3. 3Royal Assent, 26 March 2026The amendments become law. The tax ends in respect of 2025 and subsequent calendar years, so nothing is filed for 2025.
4. 42022 to 2024 stay openFiling, exemption and penalty rules for those three years are untouched, and unfiled years never become statute barred.
5. 51 January 2035, full repealThe Act and the Regulations are repealed. Until then the assessment, objection and collection machinery survives.

Do you still have to file UHT returns for 2022, 2023 and 2024?

Yes, if you were an affected owner in any of those years. The elimination is forward-looking only, and the CRA has confirmed the requirement to file and pay for the 2022, 2023 and 2024 calendar years still applies. Each year is a separate return, and each property is a separate return within each year.

There is no quiet expiry to rely on. Where a return that was required was never filed, there is no time limit for the CRA to assess the tax, penalties and interest on that property. An unfiled 2022 return is as assessable in 2034 as it was in 2023.

What is the penalty for late filing the UHT return?

The minimum is $1,000 for an individual and $2,000 for a corporation, per property, per calendar year. Above that floor the penalty is 5% of the UHT payable for the property for the year, plus 3% of that tax for each complete month the return is past due, and the greater of the two figures applies.

The sting is that an exemption does not save you. Because exemptions are claimed on the return, an affected owner with nil tax who never filed still faces the minimum penalty for each property and each year. Three unfiled years on one condo held by a corporation is $6,000 before interest.

The dates are worth writing down, because they decide how late you already are. The 2022 return was due 30 April 2023, the 2023 return 30 April 2024 and the 2024 return 30 April 2025. There was one reprieve and it has closed: the CRA waived penalties and interest on any late-filed 2022 return provided it was filed and the tax paid by 30 April 2024. Nothing comparable was ever offered for 2023 or 2024, and interest accrues on top of the penalty at the CRA's prescribed rate, which is reset every quarter.

Selling the property does not close the file either. The obligation attached to the owner, not to the land, so someone who held a Canmore condo through a company in 2022 and 2023 and sold it in 2024 still owes a return for each year they were on title on 31 December, and the minimum penalty still applies per property per year.

Who was exempt from the underused housing tax in Canada?

Exemptions fell into three families: who you were, how the property was used, and where it sat. The specified Canadian corporation, partnership and trust exemptions covered most Canadian holding structures. Use-based exemptions covered a primary place of residence, qualifying occupancy, the year you acquired the property, the death of an owner, renovation work, uninhabitability, seasonal inaccessibility and new construction not yet sold. Location-based exemptions covered vacation property in an eligible area, and that one was narrower than its name suggests: the CRA restricts it to individuals who own the property in their own right, and not in their capacity as a partner of a partnership or as a trustee of a trust. A numbered company or a family trust on title could never claim it, whatever the address.

None of them removed the filing obligation. In the CRA's words, even where ownership is exempt, an affected owner still has to file a return for the property. That single sentence is the reason most UHT penalties exist.

Did the underused housing tax ever apply to a Canmore vacation home?

Often, yes, and the vacation property exemption was never the safe assumption people treated it as, though not for the reason most owners fear. The geography was never the problem in this town. A property sits in an eligible area if it is outside every census metropolitan area and census agglomeration, or inside a census agglomeration that falls below the 30,000-resident threshold at which one becomes a specified census agglomeration. The Canmore census agglomeration has 15,990 residents, which is why the CRA's own notice UHTN14 uses Canmore as its worked example of a property that sits in an eligible area even though it is inside a population centre. Every Canmore address passed the map test. There was nothing to look up.

Two other conditions did the deciding instead, and both were harder to meet here than the map. The owner had to be an individual holding in their own right, which knocked out every corporate and trust-held condo in town before the calendar was opened. Then the owner or their spouse or common-law partner had to use the property as a place of residence or lodging for at least 28 days in the calendar year, and from 2024 the exemption could be claimed on only one property between spouses. A Canmore home let out most of the season, or visited for a few long weekends, failed on days rather than on maps.

Buying from an owner who never filed: what to check before possession

Ask three questions during conditions, because this is where a dead tax still touches a live deal. Is the registered owner an individual, a corporation, a partnership or a trustee? Were any of the owners on title non-Canadian in 2022, 2023 or 2024? And if the answer to either points to an affected owner, were UHT-2900 returns filed for each of those years?

The UHT is an owner-level liability rather than a charge that runs with the land, so it is not a lien you inherit on your title search. It is still worth raising with your own lawyer, because an unresolved federal tax exposure on a corporate vendor can complicate the closing, and it is far cheaper to ask before you remove conditions than after. If you are on the other side of that trade, selling a second home and capital gains on a second property cover the disposition side.

The taxes that did not go away in Canmore

Canmore taxes a non-primary residence at 0.833% of assessed value in 2026, against 0.457% for a primary residence, and that gap of 0.377% is charged every single year. That is the number that should replace the underused housing tax in your carrying-cost model. The old 1% federal charge only ever reached affected owners, only in three calendar years, and only on a property's taxable value, so the middle column below is a hypothetical held up for scale rather than a bill anyone in these classes received.

Read that table twice. The federal tax is gone; the municipal one is not, it applies to Canadian and foreign owners alike, and it is switched off only where an owner on title is an Alberta resident, which is why Albertans do not pay the Canmore vacancy tax. The mechanics live in the Canmore Livability Tax, the rate table in Canmore property tax 2026, and the arithmetic for your own assessment in the property tax calculator. Nightly-rental owners should read the tourist home tax rate alongside it.

Two other federal rules are worth separating from the underused housing tax in your head. The foreign-buyer ban is about whether you may purchase at all, not about what you pay to hold, and it is explained in can non-Canadians buy in Canmore. British Columbia's speculation and vacancy tax and Vancouver's empty homes tax are a province and a city acting on their own, and neither has ever reached Alberta.

What this means if you are buying or owning in Canmore

If you are buying, budget nothing for the underused housing tax and everything for the municipal one: run your target assessment through the calculator at 0.833% unless an Albertan will be on title. During conditions, ask who the registered owner is and whether returns were filed for 2022 to 2024, and let your lawyer decide whether that changes anything at closing. If you already own through a corporation or a trust and have never filed a UHT-2900, the route has a name and a shape: a Voluntary Disclosures Program application, prepared by an accountant, covering 2022, 2023 and 2024 together, and lodged before anyone at the CRA opens an audit. Those returns fell due on 30 April 2023, 2024 and 2025, so all three are already more than a year past their deadline, which is one of the conditions the programme asks for. Calgary owners can compare the whole picture in buying a second home from Calgary.