Canada – Property Taxes

What taxes and fees apply when buying a property in Canada?

The principal transaction tax when acquiring property in Canada is the Land Transfer Tax (LTT), which goes by different names in different provinces — property transfer tax or property transfer duty, depending on where you are purchasing. This is a one-time charge imposed by provincial governments at the point of purchase and applies to both residential and non-residential real estate. Across all Canadian provinces and municipalities, it is the buyer — not the seller — who is responsible for paying the land transfer tax.

Every province imposes some form of land transfer tax, with the exception of Alberta and Saskatchewan, both of which levy a considerably smaller transfer fee instead. Saskatchewan charges a land title transfer fee equivalent to 0.4% of the property value for properties exceeding $6,300 in value, and a flat $25 for those valued between $500 and $6,300. Alberta similarly foregoes a land transfer tax but imposes a land titles transfer fee made up of a base charge of $50 plus $5 for every $5,000 of property value, alongside a separate mortgage registration component calculated on the same basis — effective as of January 31, 2025.

Rates diverge considerably across the country. Some provinces use graduated brackets that mirror income tax structures, while others apply a flat percentage. In British Columbia, the General Property Transfer Tax is levied at 1% on fair market value up to $200,000; 2% on the portion between $200,000 and $2,000,000; 3% above $2,000,000; and an additional 2% on properties with a fair market value exceeding $3,000,000. Ontario also uses a tiered rate structure, with rates rising from 0.5% to a ceiling of 2.5% as the property value increases.

Toronto and Montreal both add municipal LTT charges on top of the provincial rate. In Toronto, buyers must pay both provincial and city-level land transfer tax. On an Ontario property worth $500,000, the provincial LTT comes to $6,475; on a $2 million property, it rises to $36,475. Toronto’s municipal tax uses identical brackets, meaning a $700,000 property in Toronto carries a combined LTT burden of roughly $20,950.

Quebec imposes a property transfer duties tax widely known as the “Welcome Tax” (taxe de bienvenue). Rather than being collected at the provincial level, each municipality administers and collects these duties and may set rates above 1.5% — up to a maximum of 3% (higher in Montreal) on brackets over $500,000.

In New Brunswick, the land transfer tax is calculated by applying a 1% rate to whichever is greater: the assessed value of the property or the actual purchase price.

Beyond the LTT itself, buyers should also factor in: legal or notary fees (generally CAD $1,500–$3,000 or more, depending on province and complexity); title insurance; home inspection costs; and any mortgage registration fees where applicable. While the land transfer tax typically makes up the largest share of buyer closing costs, legal fees, registration charges, and inspection fees all contribute to the total amount due at closing.

Purchasers of newly constructed properties may also be subject to the federal Goods and Services Tax (GST) at 5%, or the Harmonized Sales Tax (HST) in provinces where it applies — 13% in Ontario, and 15% in Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador. A New Housing Rebate program can partially offset this cost for properties under a specified price threshold — consult the Canada Revenue Agency (CRA) for current thresholds.

In most provinces, land transfer tax must be paid in full to the provincial government on or before the closing date and should be incorporated into the buyer’s total budget from the outset. Always confirm current rates and thresholds with the relevant provincial Ministry of Finance or revenue authority, as they are subject to revision.

What taxes and fees apply when selling a property in Canada?

Sellers in a Canadian property transaction are not liable for land transfer tax — that obligation rests entirely with the buyer. However, sellers face several other notable costs. The largest is typically real estate agent commission, which has traditionally fallen in the range of 3% to 5% of the sale price, shared between the listing and buying agents. Commission structures are evolving as a result of ongoing industry changes, so it is worth confirming current norms with a licensed real estate professional.

Sellers also incur legal fees to discharge any outstanding mortgage, update title records, and complete the conveyance — usually in the range of CAD $1,000–$2,500. If breaking a fixed-rate mortgage before the term ends, a mortgage prepayment penalty may also be charged by the lender.

If the property being sold is not the seller’s principal residence — for instance, a rental property, a vacation cottage, or an investment asset — capital gains tax will be owed on any profit realised. This is addressed in full in the section that follows. It is important to note that capital gains must be declared to the Canada Revenue Agency (CRA) in the tax year in which the sale takes place, even where sale proceeds are received on a deferred schedule.

Canada does not impose a seller-side stamp duty or equivalent transaction levy at closing. Unlike some other countries where a single transfer tax is divided between buyer and seller, Canada’s system places the entire closing-time tax burden on the buyer.

Sellers who are not Canadian residents face additional requirements, including mandatory withholding from sale proceeds — these obligations are covered in the section on foreign nationals below.

How does capital gains tax work on property in Canada?

A capital gain arises in Canada whenever a capital property is sold for more than its original acquisition cost. Rather than taxing the full gain, Canada’s system includes only a defined portion of that gain in the taxpayer’s income, which is then taxed at their regular marginal rate. Canada does not operate a separate, standalone capital gains tax rate — instead, part of the profit is folded into ordinary income and taxed accordingly.

The inclusion rate: Under current federal legislation, 50% of any realised capital gain must be included in taxable income, with the remaining 50% exempt from tax entirely. On March 21, 2025, the Government of Canada confirmed that it would not be proceeding with a previously proposed increase to the capital gains inclusion rate. The CRA has returned to administering the legislated rate of one-half, and this inclusion rate applies for the 2024 calendar year as well. Always confirm the prevailing rate directly with the Canada Revenue Agency, as this area has been subject to legislative discussion and change.

How the gain is calculated: A capital gain or loss is determined by deducting the net cost of acquiring the asset from the net proceeds received on its sale. Under CRA guidelines, this requires knowing three figures: the adjusted cost base (ACB), any outlays and expenses associated with the sale, and the proceeds of disposition. The ACB represents the total amount invested in acquiring the property — for real estate, this typically includes the original purchase price together with certain associated costs such as legal fees, commissions paid, and land transfer taxes. Capital improvements that permanently enhance the property’s value, such as major renovations, may also be added to the ACB.

Costs incurred in connection with the sale — including repair costs, agent commissions, brokers’ fees, legal charges, transfer taxes, and advertising expenditure — may be deducted from the proceeds of disposition when calculating the gain.

Worked example: Suppose you sell a rental property for CAD $600,000 that was originally purchased for $300,000. You invested $20,000 in capital improvements and paid $15,000 in selling costs. The capital gain is calculated as: $600,000 − ($300,000 + $20,000 + $15,000) = $265,000. Applying a 50% inclusion rate, $132,500 is added to your taxable income for that year and taxed at your applicable marginal rate. At the 50% inclusion rate and current federal and provincial/territorial income tax rates, effective tax on capital gains does not exceed 27% for any individual.

Canada does not apply indexation or inflation adjustment to property cost bases — gains are computed purely on nominal dollar amounts. There is also no distinction between properties held for short versus long periods under the standard capital gains inclusion rate. However, a federal anti-flipping rule deems any profit from a property sold within 12 months of purchase to be fully taxable business income rather than a capital gain, thereby eliminating the 50% inclusion rate benefit. Review the CRA’s current guidance on this “flipped property” designation for details.

Principal residence exemption: The principal residence exemption remains available to eligible taxpayers, allowing any capital gain on the sale of a qualifying principal residence to be entirely exempt from capital gains tax, provided all conditions are satisfied. Only one property may be designated as a principal residence per family unit in any given year. Non-residents are generally not eligible for this exemption.

For up-to-date rates, thresholds, and reporting requirements, consult the CRA’s Capital Gains guidance directly.

Are there any ongoing annual property taxes in Canada?

Property tax is a recurring annual charge levied by municipal governments on real estate, calculated by applying a locally determined tax rate to the assessed value of the property based on its classification. The approach broadly resembles council tax in the United Kingdom or municipal rates in other jurisdictions, though Canada’s system is more directly anchored to the assessed capital value of the specific property rather than a banded or flat charge.

The revenue raised through property taxes funds a wide array of local services: road upkeep and snow clearing, garbage collection and recycling, public transit, policing, fire services, schools, and community facilities. Municipalities are heavily reliant on property tax revenue to finance operations, and local tax rates reflect the cost of delivering services, population size and density, and the availability of other funding sources.

How is assessed value determined? Provincial assessment bodies are responsible for establishing property values, which may diverge from current market values — especially in markets where prices have moved rapidly. Assessment valuations can lag behind market conditions by several years. In Ontario, for example, the Municipal Property Assessment Corporation (MPAC) reassesses all properties — from homes and farms to commercial buildings — on a four-year cycle.

The final property tax bill is produced by multiplying the current year’s phased-in assessment value, as determined by MPAC, against Council-approved city tax rates, the City Building Fund Levy, and the Education Tax Rate as set by the Province of Ontario. In most provinces, the total bill combines a municipal component with a separately calculated education levy.

How much can you expect to pay? Property tax rates vary considerably from one Canadian municipality to the next, driven by local revenue requirements and the prevailing level of assessed property values. Lower rates tend to cluster in markets with higher home prices, while higher rates are more common where property values are lower. To illustrate: a home assessed at $1,100,300 in Vancouver, subject to a rate of approximately 0.3%, produces an annual property tax bill of around $3,301; by contrast, a home in Saint John assessed at $312,300, subject to a rate of 2.12%, generates an annual bill of $6,621.

As of 2024, some representative rates include Toronto at approximately 0.71529%, Victoria at around 0.47416%, and Winnipeg at a speculated 2024 rate of approximately 2.736437% — one of the highest in the country. Always verify current rates with the relevant municipal authority, as these figures are reviewed and adjusted annually.

Payment schedules differ by municipality: some require monthly instalments, others semi-annual or annual lump sums, and many offer pre-authorised debit plans. Property taxes can shift from year to year as a result of municipal budget decisions, updated assessments, and changing service demands. Even a stable tax rate can produce a higher bill when assessed values increase.

How does inheritance tax apply to property in Canada?

Canada imposes no inheritance tax, estate tax, or succession duty at either the federal or provincial level — setting it apart from systems in the United States, the United Kingdom, France, and many other countries where estates above defined thresholds are subject to direct taxation.

The absence of a formal inheritance tax, however, does not mean that property passes between generations entirely free of tax consequences. Instead, Canada applies the concept of deemed disposition: at the moment of death, the CRA treats the deceased as having disposed of all capital property at fair market value immediately prior to death. Any resulting capital gain — measured against the original adjusted cost base — is included in the deceased’s final income tax return and taxed at the standard 50% inclusion rate at their marginal rate.

This means the estate — rather than the beneficiaries — absorbs the tax liability on accumulated gains. Consider a property originally acquired for $200,000 that has grown to $700,000 in value at the time of death: the estate faces a deemed capital gain of $500,000, with $250,000 included in the deceased’s final return. The estate must discharge this tax liability before assets can be distributed to heirs.

Spousal rollover: Assets transferred to a surviving spouse or common-law partner upon death typically qualify for a tax-deferred rollover, meaning no capital gain is triggered at that point. The tax liability is carried forward until the surviving spouse ultimately sells or otherwise disposes of the property. This mechanism operates similarly to spousal exemptions found in other countries’ estate tax regimes.

Non-resident heirs: Beneficiaries who are not Canadian residents may face Canadian withholding tax obligations when they eventually sell a property inherited in Canada, as non-residents are subject to special rules on the disposal of “taxable Canadian property,” which includes real estate. Cross-border inheritance situations can be complex, and qualified legal and tax advice is strongly recommended. For current thresholds and filing procedures, consult the Canada Revenue Agency or a qualified Canadian tax professional.

How does gift tax apply to property transfers in Canada?

Canada levies no standalone gift tax. In contrast to systems like that of the United States, which imposes a federal gift tax with annual and lifetime exemptions, or Germany, which taxes gifts above specific thresholds, Canada has no such dedicated charge on property transferred as a gift between individuals.

That said, gifting property in Canada is not without tax consequences. When a property is gifted — including a transfer to a family member for less than fair market value — the CRA treats the transaction as a deemed disposition at fair market value. The person making the gift is treated as having sold the property at its current market value at the time of the transfer, and any resulting capital gain becomes taxable in the donor’s hands, notwithstanding the fact that no cash changed hands.

For example, if you originally purchased a cottage for CAD $150,000 and gift it to an adult child at a time when it is worth $400,000, you will be deemed to have realised a capital gain of $250,000. With a 50% inclusion rate, $125,000 is added to your taxable income for that year.

Exception — spousal transfers: Transfers between spouses or common-law partners may be completed at the adjusted cost base rather than fair market value, deferring any capital gain until the receiving partner ultimately sells the property. This “spousal rollover” is a valuable tool in estate and tax planning for couples.

In Ontario, land transfer tax does not apply to property gifted between family members where no monetary consideration was paid for the property. Similar provisions may exist in other provinces — check with the relevant provincial tax authority to confirm what applies in your jurisdiction.

Non-residents: A non-resident who receives a gift of Canadian real estate will be subject to Canadian tax rules on any eventual sale, including the withholding obligations that apply to non-residents disposing of taxable Canadian property. Non-resident donors transferring Canadian property as a gift may also be subject to deemed disposition rules. Always seek advice from a cross-border tax specialist in these circumstances.

How is rental income from property taxed in Canada?

Rental income derived from Canadian property is taxable, but the applicable rules differ meaningfully depending on whether the property owner is a Canadian resident or a non-resident.

For Canadian residents: Rental income forms part of total annual income and is taxed at the owner’s applicable marginal income tax rate. Federal income tax rates start at 15% on the first approximately CAD $57,375 of taxable income and rise to 33% on income above approximately $246,752 (as of 2025 — verify current brackets with the CRA). Provincial income tax is payable on top of the federal rate. Crucially, a range of deductible expenses can materially reduce the net rental income that is ultimately subject to tax.

Permitted deductions for rental property owners include: the interest component of mortgage payments (not capital repayment); municipal property taxes; insurance premiums; property management and agent fees; routine maintenance and repair costs (but not capital improvements); advertising expenses; and a proportionate share of utilities where the landlord is responsible for them. Capital improvements cannot be expensed in the year they are incurred but may be added to the adjusted cost base of the property, thereby reducing any capital gain on an eventual sale.

Capital Cost Allowance (CCA): Owners may also claim CCA — Canada’s equivalent of depreciation — on the building structure (excluding land), typically at 4% per year on a declining-balance basis. However, claiming CCA can create a “recapture” liability when the property is sold, which adds the previously claimed amount back into income at that time. This decision warrants careful consideration with a qualified tax adviser.

Worked example: Assume your rental property generates CAD $24,000 in annual rent. Allowable expenses total $10,000, comprising: mortgage interest $5,000, property tax $2,500, insurance $1,000, and maintenance $1,500. Net rental income is $14,000, which is added to your other income and taxed at your marginal rate. At a combined federal and provincial marginal rate of 33%, the resulting tax liability on rental income for the year would be approximately $4,620.

For non-residents of Canada: Non-residents earning rental income from Canadian property are generally subject to a flat 25% withholding tax on gross rental receipts under Part XIII of the Income Tax Act. The tenant or a Canadian property manager is ordinarily required to withhold and remit this tax to the CRA. Non-residents may alternatively file a Canadian income tax return under Part I of the Income Tax Act (a “Section 216 election”), which permits them to pay tax on net rental income after eligible deductions — often producing a lower overall tax outcome. Confirm current rates and procedures with the CRA.

Short-term rentals: Income generated through short-term rental platforms — holiday lets or vacation rentals — is also taxable as rental income in Canada. Various provinces and municipalities have introduced licensing and registration requirements for short-term rental operators. Where rental activity reaches the threshold of a business operation — for example, by providing hotel-style services — it may be reclassified as business income, with different consequences for GST/HST registration. Check with the relevant local authority and the CRA for the current requirements in your area.

Are there any tax advantages or incentives for buying property in Canada?

Canada provides a number of worthwhile tax incentives and rebate programmes for property buyers, though the majority are designed for residents and citizens rather than foreign nationals.

First-Time Home Buyer rebates on LTT: Ontario, British Columbia, Prince Edward Island, and the City of Toronto each offer land transfer tax rebates specifically for first-time home buyers. In Ontario, eligible first-time buyers can receive a rebate of up to $4,000 on the provincial land transfer tax, which covers the full tax on homes priced up to $368,000. For homes above that threshold, the buyer receives the maximum $4,000 rebate and pays the remaining LTT balance. These rebates are generally restricted to Canadian citizens or permanent residents purchasing their first home.

First Home Savings Account (FHSA): Introduced in 2023, the FHSA enables eligible first-time buyers who are Canadian residents to contribute up to CAD $8,000 annually — up to a lifetime ceiling of $40,000 — into a dedicated registered account. Contributions are tax-deductible in the year they are made, as with an RRSP, and qualifying withdrawals applied to a first home purchase are entirely tax-free, similar to a TFSA. This is among the most effective property-related tax tools currently available to eligible buyers. Confirm current contribution limits and eligibility criteria with the CRA.

Home Buyers’ Plan (HBP): Canadian residents may withdraw up to CAD $60,000 from their Registered Retirement Savings Plan (RRSP) on a tax-free basis to fund the purchase of a first home (as of 2024). The withdrawn amount must be repaid to the RRSP over a 15-year period. Verify the current withdrawal limit with the CRA.

GST/HST New Housing Rebate: Purchasers of newly built homes may be eligible to recover a portion of the federal GST or the provincial component of HST paid on the purchase price, subject to a price ceiling. This serves as a partial offset against the sales tax cost that applies to new construction.

Principal residence exemption: As discussed in the capital gains section, the ability to sell a principal residence entirely free of capital gains tax is arguably the single greatest tax benefit available to Canadian homeowners, with the potential to shelter very substantial gains from taxation.

Non-residents and incentives: The majority of the programmes described above — including the FHSA, the RRSP Home Buyers’ Plan, and LTT rebates — are restricted to Canadian residents, citizens, or permanent residents. Foreign nationals should not assume they qualify and must verify eligibility directly with the relevant authority before relying on any of these measures.

What are the tax implications for foreign nationals buying property in Canada?

Canada has enacted significant additional tax measures and ownership restrictions targeting foreign nationals in recent years, and the regulatory environment in this area is both complex and subject to change. Any non-citizen considering a property purchase in Canada should engage specialist legal and tax counsel before proceeding.

Prohibition on foreign purchase of residential property: The Prohibition on the Purchase of Residential Property by Non-Canadians Act, which took effect in January 2023, bars foreign buyers from acquiring residential property in Canada. This federal restriction has been extended and amended over time; check its current status with the Canada Mortgage and Housing Corporation (CMHC) and a qualified Canadian real estate lawyer, as exemptions exist for certain visa holders, international students, and other categories.

Non-Resident Speculation Tax (NRST): Where residential purchases by non-residents are permitted, additional surcharge taxes apply. Ontario imposes a 25% Non-Resident Speculation Tax on qualifying residential purchases, while British Columbia levies a 20% surcharge in designated areas. Foreign nationals must also pay an Additional Property Transfer Tax on the fair market value of the residential portion of properties located within specified regional zones in BC.

Underused Housing Tax (UHT): Canada introduced a federal Underused Housing Tax at a rate of 1% per year, applied to the assessed value of residential properties that are vacant or underused and owned by certain non-resident, non-Canadian owners. Properties that are rented out or used as a primary residence may qualify for exemptions. Confirm current rules and annual filing obligations with the CRA.

Capital gains on disposal by non-residents: When a non-resident sells Canadian real estate, withholding obligations arise. Under Section 116 of the Income Tax Act, the buyer must withhold a specified portion of the purchase price unless the non-resident seller has first obtained a Certificate of Compliance from the CRA. Non-residents are required to report and pay Canadian tax on any capital gain from the sale of taxable Canadian property, which includes real estate. The principal residence exemption is not generally available to non-residents.

Rental income withholding: As outlined in the rental income section, non-resident landlords are subject to a 25% withholding tax on gross rental receipts, unless a Section 216 election is filed enabling taxation on net income instead.

Double taxation treaties: Canada maintains tax treaties with numerous countries that may reduce or eliminate the risk of double taxation on property-related income and capital gains. The specific provisions available depend on the treaty between Canada and the buyer’s country of residence. Review the relevant treaty terms and consult a tax adviser with expertise in both Canadian and home-country tax law to understand how your particular circumstances will be treated.

Given the complexity of this area and the pace at which rules have been changing, always verify the current position with the Canada Revenue Agency and obtain advice from a qualified Canadian tax and property lawyer before committing to any purchase decision.

How do I navigate the property purchase process in Canada as a buyer?

1. Check eligibility to purchase: Confirm whether you are legally permitted to buy residential property in Canada. Foreign nationals should check current rules under the Prohibition on the Purchase of Residential Property by Non-Canadians Act and any applicable exemptions with the CMHC and a qualified solicitor.
2. Obtain mortgage pre-approval (if applicable): Arrange financing before making an offer. Non-residents may face stricter requirements from Canadian lenders, including higher down payments (sometimes 35% or more).
3. Engage a real estate agent and lawyer or notary: Appoint a licensed real estate agent and a property lawyer (or notary in Quebec and BC) to act in your interests throughout the transaction.
4. Make an offer and sign the Agreement of Purchase and Sale: Your agent will help you prepare a formal offer. Once accepted, a deposit (typically 5% of purchase price) is usually required within 24 hours.
5. Complete due diligence: Arrange a home inspection, review title documents, confirm zoning, and check for any outstanding liens or encumbrances on the property.
6. Obtain title insurance: Title insurance protects against title defects and is standard practice in Canada.
7. Finalise mortgage and closing documents: Work with your lender and lawyer to arrange final mortgage documents and review the Statement of Adjustments, which sets out all costs payable at closing including the LTT.
8. Close the transaction and pay taxes: On the closing date, land transfer tax and all other fees are paid, the deed is registered, and ownership is transferred. Your lawyer handles most of this on your behalf.
9. Register and file as required: Non-resident buyers must ensure they comply with CRA reporting requirements, including any Underused Housing Tax obligations or withholding tax filings relevant to their situation.

Frequently asked questions: property taxes in Canada

Do I pay capital gains tax if I sell my Canadian property as a non-resident?

Yes. Non-residents who dispose of Canadian real estate are liable to pay Canadian capital gains tax on any profit from the sale. The buyer is legally obliged to withhold a portion of the purchase price unless the non-resident seller has obtained a Certificate of Compliance (Section 116 certificate) from the CRA in advance of closing. The principal residence exemption is not generally available to non-residents. Engage a Canadian tax adviser well ahead of the intended sale date to avoid complications at closing. Always confirm current rates and procedures with the Canada Revenue Agency.

Can I deduct mortgage interest on rental income in Canada?

Yes. Where you are earning rental income from a Canadian property, the interest component of your mortgage payments is deductible against that rental income. It is only the interest portion — not the principal repayment — that qualifies for deduction. Canadian residents declare this on their annual income tax return; non-residents may also claim it by electing to file under Section 216. Retain comprehensive records of all mortgage statements showing the separation of interest from principal.

Is there a wealth tax on property in Canada?

No. Canada does not impose an annual wealth tax or net worth tax based on property holdings. The annual municipal property tax, which is applied to the assessed value of land and buildings, is a charge on property ownership and is not a wealth tax. There is no additional federal levy calculated on the aggregate value of property owned. The Underused Housing Tax of 1% per year applies specifically to residential properties that are vacant or underused and owned by certain foreign or non-Canadian owners — it is not a general wealth tax.

What is the principal residence exemption and how does it work?

The principal residence exemption (PRE) allows Canadian residents to sell their primary home entirely free of capital gains tax, regardless of the size of the profit. To be eligible, the property must be formally designated as your principal residence for each year the exemption is claimed, and a single family unit can designate only one property per year. The exemption does not apply automatically — you must report the sale and make the designation on your tax return. Non-residents are generally not eligible for the PRE. Confirm the current conditions with the Canada Revenue Agency.

How much is land transfer tax on a $750,000 property in Ontario?

As of 2025, applying Ontario’s tiered LTT schedule, a $750,000 property attracts approximately $11,475 in provincial land transfer tax. For a property located in Toronto, an additional municipal LTT of approximately the same magnitude applies, bringing the combined total to roughly $22,950 before any rebate. First-time home buyers in Ontario are entitled to claim a rebate of up to $4,000 on the provincial component. Use the official provincial calculator or seek confirmation from your lawyer to establish the precise amount at the time of your transaction.

Does Canada have a property transfer tax on gifts to family members?

In most provinces, gifting a property to a family member triggers land transfer tax on the same basis as a conventional sale, because LTT is assessed on the fair market value of the property rather than the amount — if any — actually paid. Ontario, however, exempts gifts of property between family members from LTT where no consideration is exchanged. Regardless of any LTT exemption, the donor will still face a deemed capital gain at fair market value for income tax purposes. Provincial rules differ, so verify the applicable position with a local solicitor or the relevant provincial Ministry of Finance.

Do I need to register or obtain a licence to rent out my Canadian property?

This depends on the type of rental and the municipality in which the property is located. Long-term residential lettings are governed by provincial landlord and tenant legislation and do not generally require a separate licence. Short-term rentals listed on holiday or vacation platforms are increasingly subject to municipal registration requirements or business licences, and some cities place restrictions or outright bans on such activity. Non-resident landlords must also ensure compliance with CRA withholding and reporting obligations on rental income. Check with your local municipality for licensing requirements and consult the CRA for federal obligations.

Are there any taxes specific to vacant properties in Canada?

Yes. At the federal level, the Underused Housing Tax (UHT) imposes a 1% annual levy on the assessed value of residential properties that are vacant or underused, targeting certain non-resident and non-Canadian owners. In addition, municipalities such as Vancouver and Toronto have introduced their own vacant home taxes, which operate separately from the UHT and can apply to both resident and non-resident owners who leave properties unoccupied for substantial periods of time. Exemptions are available in various circumstances but must be claimed on an annual basis. Verify the current rules with both the CRA and the relevant municipal authority for your area.