What Changed — At a Glance
- UHT abolished for 2025 and all future years (Bill C-15, Royal Assent March 26, 2026)
- No UHT return or payment required for 2025 onward
- 2022, 2023, and 2024 UHT obligations still apply — CRA can still audit and penalise
- Nova Scotia Non-Resident Deed Transfer Tax increased to 10% (April 1, 2025)
- Annual Non-Resident Property Tax ($2/$100 assessed value) remains in place
The UHT Is Gone — But Not for the Years You Might Have Missed
On March 26, 2026, Canada's federal government gave Royal Assent to Bill C-15, formally repealing the Underused Housing Tax Act. The UHT — a 1% annual tax on vacant or underused residential property owned by non-residents — no longer applies from the 2025 calendar year onward.
For many non-resident owners of Nova Scotia property, this is welcome news. The UHT was widely criticised as administratively burdensome, poorly targeted, and costly to comply with relative to the revenue it generated. The federal government itself described it as 'inefficient' in the 2025 Budget.
However, the repeal is not retroactive. The Canada Revenue Agency (CRA) has confirmed that the filing and payment obligations for the 2022, 2023, and 2024 calendar years remain fully in force. If you own or have owned residential property in Nova Scotia as a non-resident and have not filed UHT returns for those years, you are still exposed to significant penalties.
What the CRA Can Still Do for 2022–2024
The minimum penalty for an individual who fails to file a UHT return is $10,000 per property per year. For corporations, it is $250,000. These penalties apply even if no tax is ultimately owed — the obligation to file and declare an exemption was separate from the obligation to pay.
The CRA's normal reassessment period applies. For most non-residents, this means the agency can audit and reassess returns for up to six years. If you have not filed, the clock has not started running.
The CRA's Voluntary Disclosures Program (VDP) can reduce or waive penalties if you come forward before the CRA contacts you. If you have missed one or more years, acting now is significantly better than waiting.
Nova Scotia's Own Non-Resident Tax Landscape
The abolition of the federal UHT does not mean the tax burden on non-resident Nova Scotia property owners has disappeared. Nova Scotia has its own provincial tax framework that remains fully in place — and has, in fact, become more demanding.
Since April 1, 2025, the Non-Resident Provincial Deed Transfer Tax (NRDTT) stands at 10% of the purchase price or assessed value, whichever is higher. This is a one-time tax applied at the time of purchase. It doubled from 5% on April 1, 2025, applying to all Agreements of Purchase and Sale signed after March 31, 2025.
In addition, non-resident owners pay an annual Non-Resident Property Tax surcharge of $2.00 per $100 of assessed value. This is separate from the regular municipal property tax that all owners pay. It can be waived if the property is rented to a Nova Scotia resident — but the waiver is not automatic and must be applied for.
Rental Income: The 25% Withholding Tax Still Applies
If you rent out your Nova Scotia property as a non-resident, Part XIII of the Income Tax Act requires your tenant or property manager to withhold 25% of the gross rental income and remit it to the CRA. This is often overlooked — and the consequences of non-compliance fall on both the non-resident owner and the tenant.
There are two important mechanisms to reduce this burden. First, by filing an NR6 form with the CRA before the rental year begins, you can arrange for withholding to be calculated on net income (after expenses) rather than gross. Second, by electing under Section 216 of the Income Tax Act, you can file a Canadian tax return and pay tax only on your net rental income — which, for most owners, results in a significantly lower effective rate than 25% of gross.
Maritime Property Solutions can act as your agent for withholding tax purposes and assist with the NR6 filing process. This is one of the most impactful tax optimisation steps available to non-resident rental property owners in Nova Scotia.
What This Means for You — A Practical Summary
If you own residential property in Nova Scotia as a non-resident, here is where things stand as of May 2026. The federal UHT is gone for 2025 and beyond — no further action required on that front going forward. However, if you have not filed UHT returns for 2022, 2023, or 2024, those obligations remain and the penalties are substantial. Review your filing history and, if necessary, use the CRA's Voluntary Disclosures Program.
On the provincial side, the annual Non-Resident Property Tax surcharge continues. If you rent your property, the Part XIII withholding tax framework applies and should be managed proactively. And if you are planning to purchase additional property in Nova Scotia, the 10% Non-Resident Deed Transfer Tax is now a significant cost to factor into your calculations.
Navigating these obligations from abroad is not straightforward. Maritime Property Solutions works directly with non-resident owners across Atlantic Canada — not just on property oversight, but on the tax and compliance side as well. If you have questions about your specific situation, we are here to help.
Frequently Asked Questions
Is the Underused Housing Tax still in effect in Canada?
No. The UHT was abolished effective 2025. Bill C-15 received Royal Assent on March 26, 2026. No UHT return or payment is required for 2025 or any subsequent year.
Do I still need to file a UHT return for 2022, 2023, or 2024?
Yes. The repeal applies only from 2025 onward. The CRA can still audit, assess penalties, and demand returns for the 2022, 2023, and 2024 calendar years. Minimum penalty for non-filing: $10,000 per property per year for individuals.
What taxes do non-residents still pay on Nova Scotia property?
Three main taxes remain: (1) Non-Resident Deed Transfer Tax of 10% on purchase, (2) annual Non-Resident Property Tax of $2 per $100 of assessed value, and (3) 25% withholding tax on gross rental income (reducible via NR6/Section 216).
How much is the non-resident deed transfer tax in Nova Scotia?
As of April 1, 2025: 10% of the purchase price or assessed value (whichever is higher). It was 5% from July 2023 to March 2025.
Can I reduce the 25% withholding tax on my Canadian rental income?
Yes. File an NR6 form before the rental year to calculate withholding on net income. Or elect under Section 216 to file a Canadian return and pay tax only on net rental income — typically far less than 25% of gross.
Who can help me with past UHT filings or Nova Scotia property tax compliance?
Maritime Property Solutions Inc. offers tax consulting support for non-resident owners in Nova Scotia, including UHT compliance reviews, property tax assessment checks, and withholding tax agent services.
Sources & Further Reading
- Canada.ca — What has changed: Underused Housing Tax
- Government of Nova Scotia — Non-Resident Provincial Deed Transfer Tax
- Canada.ca — Rental income and non-resident tax
- Canada.ca — Income Tax Guide for Electing Under Section 216
- McMillan LLP — Budget 2025: Underused Housing Tax Eliminated
- Knowledge Bureau — The UHT May Be Cancelled, But Vacancy Taxes Remain
Questions About Your Nova Scotia Property Taxes?
Whether you need a review of past UHT obligations, help with the annual property tax surcharge, or withholding tax agent services for your rental property — we are here.