On June 9, 2022, the Government of Canada implemented the new Underused Housing Tax (UHT) that will affect certain residential property owners as of December 31, 2022. Owners who are obligated to file a UHT return are considered affected owners. Owners who are not obligated to file a UHT return are considered excluded owners. For a full overview of who falls under each category, see our previous article

You may feel honored when you are asked to be somebody’s executor or trustee, but once your duties begin it usually doesn’t take long to figure out just how big of an undertaking the role is. The introduction of UHT adds one more complexity to the process.  

We asked the CRA UHT technical division on March 15, 2023 for further clarification surrounding the different stages of ownership an estate might run into and some additional questions that come up in the process.  

Who is considered the owner of a property for the purpose of UHT?

For the purposes of the UHT, the owner of a residential property is determined by the name listed on the land title registry system on December 31. Depending on the circumstances and the timing of the estate administration process, this could mean that the property of the deceased individual could be held by the following: 

  1. A deceased individual; 
  2. The personal representative of a deceased individual; or 
  3. The personal representative of the deceased individual in their capacity as a trustee of a testamentary trust specified in the will. 

As the executor or the administrator of the estate, you may have UHT filing obligations under each of the situations described above. 

Deceased individual

If an individual was an excluded owner during their lifetime, they will remain an excluded owner after their death and there will be no obligation to file a UHT return. If an affected owner is still on the title for the property, then they will remain an affected owner.  

Personal representative of a deceased individual

As long as the definition of a personal representative in the Underused Housing Tax Act (UHTA) is met, a personal representative for a deceased owner is not considered a trustee of a trust. 

In cases where the title is transferred to the personal representative, they become the property owner as long as they hold the title in their capacity as the personal representative. 

If the personal representative of a deceased individual is a Canadian citizen or permanent resident, they are considered an excluded owner and therefore don’t need to file a UHT return. If they are considered an affected owner they must file a UHT return. 

The CRA has confirmed that there is no specific period in which a property held by a personal representative would be considered as held by a trustee of a trust, despite the 36-month graduated rate estate (GRE) period applicable to other estates under the Income Tax Act (ITA). 

As it stands, the CRA is not using the ITA to determine when a personal representative is considered a trustee of a trust for the purposes of the UHT. They are currently basing this interpretation on common law principles unless otherwise referred to in the UHTA.  

Trustee of a Testamentary Trust

If a will establishes a testamentary trust and the personal representative serves as both the trustee of the trust and executor or administrator of the estate, the CRA regards the executor’s responsibilities to be finished upon transferring the property title from the deceased owner to the personal representative. From that point on, the personal representative is deemed to be holding the property in their capacity as a trustee of a trust, meaning that they now have a UHT filing obligation.  

Remember that not all deceased individuals have to file UHT returns—only those that are affected owners (e.g. non-Canadians). If the owner on title in the land registration system is the deceased excluded owner or the personal representative is an excluded owner, then the personal representative for the deceased owner is excluded from filing a UHT return.   

What if the deceased was a non-resident or the beneficiaries of the estate are non-residents? 

When the personal representative is deemed to hold the property as a personal representative of the deceased owner, the CRA only looks at the personal representative’s status as an affected or excluded owner. The CRA does not consider beneficiaries of the estate nor deceased owners’ status after the land title has been transferred to the name of the personal representative.   

If the personal representative is an excluded owner (Canadian citizen or permanent resident), there is no UHT filing obligation for the full duration that the property is held by the personal representative. 

If the personal representative is an affected owner under the UHTA (non-resident), they are obligated to file a UHT return. 

Where a testamentary trust is specified in the will, the trustee is holding title as the trustee of the trust. In this case, the CRA looks at the beneficiaries to determine the UHT obligation. When the beneficiaries of the testamentary trust are non-Canadians, the specified Canadian trust exemption does not apply to the trust and there is a UHT filing obligation. 

What are the exemptions available for affected owners? 

For the year of death and the year following death, there are exemptions available for the deceased owner and the personal representative of the deceased owner. The exemption for deceased affected owners and personal representatives requires that the estate remain unsettled on December 31 of the calendar year. The exemption period is intended to provide the personal representative with time to obtain the Grant of Probate and liquidate the estate or make other arrangements for the property in question.

It is important to note that the land title must specifically state that the title holder is a trustee or an executor for the deceased for this exemption to apply to a personal representative of the deceased. 

 For more information for how this impacts an affected owner, please refer to Example 2 on the CRA’s Exemptions for Deceased Individuals and Their Personal Representatives or Co-Owners page for more details. 

Obtaining a Clearance Certificate from the CRA as an executor is even more important now, given the large penalties for not filing a UHT return. 

What if the land registration is not updated but the property is sold prior to December 31?

The CRA’s current interpretation is that any individual listed on the land title on December 31, irrespective of whether the unit is sold prior to the year-end, is considered the owner for the purposes of UHT and may have a filing requirement.  

What are the penalties for failing to file an Underused Housing Tax return on time? 

There are significant penalties for failing to file your UHT return when it is due. Affected owners who do not file on time will be penalized a minimum of: 

  • $5,000 for individuals  
  • $10,000 for corporations 

An affected owner of an exempt property could still be subject to UHT if the UHT return is not completed.  

For additional information on filing a UHT return, see our UHT Checklist or contact us with your questions. 

Please note: the CRA has been making a number of updates to the interpretations of the Underused Housing Tax Act. Please contact our office to ensure you have the most up-to-date information on filing requirements. 


This post has been prepared for general information purposes. It is not advice. The information presented may not fit your unique situation, please consult one of our trusted business advisors at RHN CPA for further clarification and interpretation of your circumstances.