The UHT May Be Cancelled, But Vacancy Taxes Remain

As tax professionals, you are keenly aware of the constant changes our federal government makes to the Income Tax Act. Adjustments are made, and you must adapt. Not often, though, is a tax eliminated altogether. But in the case of the Underused Housing Tax (UHT), that is exactly what has happened – it was cancelled in the federal budget of November 4, 2025, but Canada’s underused housing taxes have not been eliminated. Here’s what you need to know for tax season 2026.

In the market for a Tesla?  Now would be a good time to purchase the luxury model, as  Canada now has a new tax act:  The Select Luxury Items Tax Act, slated to come into effect September 1, 2022 if proposals released March 11, 2022 are passed into law.   The proposed 173 pages of legislation for Canada’s new luxury tax, first introduced in the April 2021 federal budget, targets buyers of luxury cars and aircraft with a retail price tag of $100,000 or more and boats valued at $250,000 or more.  Here are the reasons why you need to pay attention:

Throughout the calendar years 2012 - 2015, a Toronto man named Perry Fousteris and representatives of Fousteris’ corporation defrauded international investors by encouraging international investors to purchase shares of corporation’s owned by Fousteris. This fraud attracted the attention of the CRA, as well as penalties, interest and jail time.  Here is what happened:

When a business hires an employee, it is important for that employee to be “formally” hired, that is with a role description, a rate of pay or salary level and a statement of expectations that define the relationship between the employer and employee,  all well documented and filed in case of audit from the CRA. This is particularly important post-COVID, as CRA will be auditing the Canada Emergency Wage Supplement (CEWS) payments businesses received, right up to the end of 2023.   But it is also very important if you have hired family members.

What’s the biggest difference between a co-borrower and a cosigner? It relates to the degree of investment in the loan. Here are the details:

In the last federal budget, the government proposed to allow Canadian Controlled Private Corporations to claim 100% CCA in the year of acquisition for assets purchased after April 18, 2021, to a maximum of $1,500,000.  However, legislation has yet to be introduced to implement that change.  That’s turning out to be a big problem for tax advisors and their clients.  Here’s why:

Most people know that when you miss filing a tax return your family will miss out on receiving the Canada Child Benefit.  However, did you know that you can retroactively claim the CCB by filing those missed returns?  How far back you can go, however, depends on what type of CCB you file for.