Tax Planning
Elimination of Underused Housing Tax & Excise Duty Adjustments: What Property, Business, and Excise Tax Impacts to Expect in Canada
Key changes include the phasing out of the Underused Housing Tax from 2025, plus updated excise duty rates for alcohol and brewery businesses starting April 1, 2026.
By NomadicTax Research Team • 5-8 min read • April 26, 2026
## Underused Housing Tax (UHT) — Phased Out Starting 2025
- In **Budget 2025**, the government proposed and moved to **eliminate the Underused Housing Tax (1% annual levy)** effective for the **2025 calendar year onward**, meaning owners no longer need to pay or file UHT returns starting 2025. ([budget.canada.ca](https://budget.canada.ca/2025/report-rapport/tm-mf-en.html?utm_source=openai))
- However, **requirements, penalties, or filings** for **2022–2024** calendar years **still apply**. That includes filing returns and paying any owed tax for those years. ([budget.canada.ca](https://budget.canada.ca/2025/report-rapport/tm-mf-en.html?utm_source=openai))
**Implications**:
- Property owners previously exposed to UHT—including some foreign nationals and Canadian owners with trusts or corporations—can reduce property-holding costs and avoid ongoing reporting requirements.
- Businesses and corporations fitting former UHT categories should still check their past filings, ensure UHT compliance through 2024, and address any outstanding returns or penalties.
## Excise Duty Rate Changes for Alcohol and Brewery Industries (April 1, 2026)
- As of April 1, 2026, **federal excise duties** on **beer, spirits, and wine** have been **indexed by ~2%**, reflecting inflation adjustments, under the authority of the **Excise Act** and Budget Implementation Act, 2024. ([immigrationnewscanada.ca](https://immigrationnewscanada.ca/new-canada-laws-rules-coming-april-2026/?utm_source=openai))
- The **temporary relief** that cut excise duty rates **by half on the first 15,000 hectolitres produced by domestic breweries** ended as of April 1, 2026. ([immigrationnewscanada.ca](https://immigrationnewscanada.ca/new-canada-laws-rules-coming-april-2026/?utm_source=openai))
**What breweries should do**:
- Re-price products to account for higher excise costs—especially small breweries used to benefiting from the halved rate.
- Forecast cash flow changes due to the increase in excise duties on volumes formerly under rate relief.
- Update invoicing, cost accounting, and reporting systems to match new rate schedules; ensure correct duties paid when filing invoices and returns.
## Combined Takeaways
- For **property owners**, removing UHT means simplified tax exposure and fewer obligations—but past years still matter.
- For **businesses in alcohol/beer/spirits**, excise duty increases will raise costs and potentially shrink margins, especially for small domestic producers who were relying on relief.
Whether you're an individual, property owner, or business in brewing/spirits, stay aware of transitional rules and ensure OLD obligations are met—even as new cost dynamics emerge under the new policies.