2025-Nov-28
Budget 2025 brings changes to Underused Housing Tax and Luxury Tax
The 2025 Canadian federal budget has received mixed reviews, but two changes might interest cottage owners: the elimination of the Underused Housing Tax (UHT) and the removal of the luxury tax on aircraft and vessels.
Underused Housing Tax (UHT) Cancellation
The UHT, a 1% annual tax on vacant or underused residential properties owned by non-Canadians and some trusts, is eliminated effective immediately. You won’t need to file UHT returns or pay taxes for 2025 and beyond, but you’ll still need to address filings and penalties for 2022-2024.
Luxury Tax on Aircraft and Vessels Cancellation
The 10% luxury tax on aircraft and vessels is no longer applicable as of November 4, 2025. The 10% tax was applied to boats valued above $250,000 and aircraft valued above $100,000.
These changes are part of the government’s efforts to boost economic growth and reduce costs for Canadians. The full budget report can be found here.
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