Two different things get filed under one heading in most landlords' heads: the federal Underused Housing Tax, and the vacancy taxes charged by individual cities and by British Columbia. One of them ended this year. The rest did not, and they work in a way that costs money if you assume otherwise.
What ended
The federal Underused Housing Tax is finished. Bill C-15 received royal assent on March 26, 2026, and it amends the Underused Housing Tax Act "to end the underused housing tax in respect of 2025 and future calendar years". No tax is payable for 2025 onward and no return is required for those years. The Act itself is repealed later.
That takes one federal filing off your calendar. It takes nothing else off.
What did not end
Vacancy taxes charged by cities and provinces are separate programs run by separate governments, and the federal repeal has no effect on any of them. Toronto charges a Vacant Home Tax. British Columbia charges a provincial Speculation and Vacancy Tax across designated areas. The City of Vancouver charges its own Empty Homes Tax on top of the provincial one. Ottawa charges a Vacant Unit Tax.
Own a rental in Vancouver and you sit inside two of these at once. Each one wants its own declaration, on its own deadline, from its own portal.
A rented unit is exempt, but not automatically
Here is the part that catches people. A unit with a tenant in it is not vacant, so it owes no vacancy tax. The exemption is real. It is also not applied for you. You have to claim it, every year, by filing a declaration of occupancy status.
Toronto requires owners "to let the City know if their property is occupied or vacant by making a declaration every year". Miss the deadline and what arrives is not a reminder. The property is deemed vacant, and the City issues a Notice of Assessment for the tax. Since the 2024 taxation year the Toronto rate has been 3 per cent of the property's current value assessment. On a property assessed at 700,000 dollars, that is a 21,000 dollar bill for a unit that had a paying tenant in it for all twelve months.
British Columbia runs on the same logic. Owners in the designated taxable areas "declare every year for the speculation and vacancy tax, even if there is no change to your information". Let March 31 pass with nothing on file and the province issues a Notice of Assessment at the maximum rate. You are then arguing your way back out of a tax you never owed, rather than never owing it.
Every owner on title declares separately
Co-owned property is where this goes wrong quietly. British Columbia is blunt about it: "When a property has more than one owner, each person on title needs to make a separate declaration, even if the other owner is your spouse or relative."
One declaration per property is not enough. If you and a business partner hold four units together, that is eight declarations, not four. The partner who never opens the mail is a real exposure here, because the province sends each owner their own letter with their own code, and one unopened envelope produces a full assessment on a fully occupied building.
The deadlines are not the same
These programs do not share a calendar. British Columbia mails declaration letters in January and February and closes on March 31, with payment due on the first business day in July. Toronto closes on April 30. Ottawa closes in March and Vancouver in February, both ahead of Toronto. Look up the current date for your own municipality each year instead of carrying last year's forward, because the dates have moved before.
Note also what a declaration covers. The one you file in early 2027 reports on occupancy during 2026, which is the year running right now. The tenancy records that prove the unit was occupied have to survive until you file.
You may still owe a federal return for 2022 to 2024
Ending the tax for 2025 onward did nothing to the years before it. The Underused Housing Tax requirements continue to apply for the 2022, 2023 and 2024 calendar years, and a return that was never filed for those years is still outstanding.
Most owners can stop reading here, because amendments narrowed the filing group sharply. The Canada Revenue Agency notes that starting with the 2023 calendar year, the majority of Canadian owners of residential property do not have to file a return or pay the tax. The year worth checking is 2022, when the filing group was wider. If you held residential property through a corporation, a partnership or a trust that year, a return could have been due even though no tax was payable. Check the CRA guidance against your 2022 ownership structure and close it out if it is open.
What to do this month
September is the right month for this because nothing is due, which means you can build the calendar rather than react to a notice.
- List every residential property you own or manage, with its municipality and its assessed value.
- Mark which ones sit inside a vacancy tax program. In British Columbia, check the property against the province's map of designated taxable areas rather than guessing from the postal code.
- For each one, write down every name on title. That is your declaration count, not the property count.
- Put each program's deadline in a shared calendar with a reminder four weeks ahead, and confirm the date when the window opens.
- Record the mailing address each program has for each owner. A declaration letter sent to an address you moved away from is the most common way this fails.
- Keep the lease and rent ledger for the current year somewhere you can retrieve them next spring, since they are what prove occupancy if an assessment does arrive.
None of this is difficult work. It is a filing task with a hard date and an expensive default, which is a combination that punishes anyone treating it as paperwork to handle when it comes up. A rental that was occupied all year should never generate a vacancy tax bill, and the only thing standing between the two is a form somebody has to remember to file.