# What is the 'Underused Housing Tax' (UHT) and who pays it?

> The UHT is a 1% annual tax on the value of vacant or underused residential property in Canada owned by non-Canadian citizens or permanent residents.

Category: Regulatory
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/regulatory/what-is-the-underused-housing-tax-uht-and-who-pays-it

## Answer
The UHT is a 1% annual tax on the value of vacant or underused residential property in Canada owned by non-Canadian citizens or permanent residents. Even if exempt, non-residents MUST file an annual return. Failure to file carries significant penalties ($5,000+). Expats who are Canadian citizens are generally exempt from the tax itself but should verify filing requirements if they own through a corporation.

## Related guide
- https://ratellow.com/guides/non-resident-expat-mortgage

## Sources
- B-20 Foreign Income Verification — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.3.1
- Foreign Buyer Ban Exceptions — https://www.canada.ca/en/financial-consumer-agency/services/mortgages/renew-mortgage.html#toc3