The 2021 Federal budget proposes to introduce a new national one percent (1.00%) tax on the value of non-resident, non-Canadian owned residential real estate property considered to be vacant or underused. The tax applies to owners other than Canadian citizens or Canadian permanent residents, with related tax obligations commencing in the 2023 tax year.

Taxable owners will be required to file with the Canada Revenue Agency, an annual declaration for the prior calendar year for each Canadian residential property they own. A failure to file will result in penalties, interest and an unlimited assessment period.

Upon filing the annual declaration, the otherwise taxable owner may be eligible to claim an exemption from the tax for property that is leased to qualified tenants for a minimum period in a calendar year. When an exemption is not available, the owner will be required to calculate the amount of tax owing and report and remit it to the CRA by the filing due date.

We expect that the government will provide an opportunity for stakeholders to comment on the proposed tax. The government will also seek consultation on whether, how and when the proposed tax will apply in smaller, resort and tourism communities.  We will keep you advised of developments, in this regard.

For further detail regarding the Federal government’s position on “Unproductive Use” of Canadian Housing by Foreign Non-resident Owners, see the recent statement of the Deputy Prime Minister

Our lawyers regularly deal with the issues set out in this article, and many other issues related to or arising from real estate, corporate, intellectual property and trust matters.

If you have any questions or would like advice related to real estate, corporate, intellectual property and trust matters, please contact us at 604-688-4900 or by email at or