Does the underused housing tax apply to 24 Sussex Drive?

By Rudy Mezzetta | September 12, 2023 | Last updated on September 12, 2023
3 min read

Is 24 Sussex Drive, famously sitting unoccupied in Ottawa, subject to the federal government’s new 1% underused housing tax?

The answer is no.

That’s because the prime minister’s official residence, plus five other official residences, is owned by the National Capital Commission (NCC). The commission is a Crown corporation and an agent of His Majesty, and is therefore an “excluded owner” under the Underused Housing Tax Act.

The Canada Revenue Agency (CRA) confirmed to in an email that the country’s sovereign, agents of the sovereign and the provinces are excluded owners and are not required to file a UHT return or pay the UHT.

Canadians who own a residential property through a trust or private corporation are not so lucky — and the extended deadline for filing a return and paying any applicable tax is approaching.

The CRA announced in March that it will not apply penalties or interest to UHT returns or payments sent late as long as the CRA receives them by Oct. 31. The official deadline for filing the UHT return and making UHT payments was May 1 for the 2022 tax year, and remains April 30, 2024 for the 2023 tax year.

“Affected owners” must file a UHT return annually and pay any applicable tax. The failure to file a return on time carries big penalties, even if no tax is owing because the property is occupied or is eligible for another exemption.

The UHT is an annual 1% tax on the ownership of vacant or underused housing in Canada and is meant to address the issue of housing affordability in Canada. The UHT Act was passed in June 2022 and became retroactively effective to Jan. 1, 2022.

Canadians who own a residence directly and listed Canadian public corporations are excluded owners who don’t have to file a UHT return.

However, Canadians who own a residence through a trust, a private corporation or as a partner in a partnership are affected owners who do have to file a return. Foreigners and non-permanent residents who own a residence in Canada are also affected owners.

The penalties for late-filing the return are stiff: at least $5,000 for individuals, and $10,000 for corporations, for each residential property. If the UHT is payable, penalties may climb higher the later the return is filed, with no cap in the legislation.

An affected owner must pay the 1% annual tax on the value of each residential property unless they qualify for an exemption. Exemptions are available, for example, for residential properties that serve as primary residences or meet “qualifying occupancy” requirements; a vacation home located in an eligible area; or a property that is seasonally inaccessible or uninhabitable for part of the year.

A “specified Canadian corporation” also is exempt from tax if foreign owners own or control less than 10% of the shares or votes. A “specified Canadian partnership” or a “specified Canadian trust” is exempt from tax if all partners or beneficiaries, respectively, are excluded owners or are specified Canadian corporations.

Late in 2022, the NCC began the process of closing 24 Sussex Drive to prepare for work that began this year, including removing asbestos and obsolete mechanical, heating and electrical systems.

The federal government is assessing options for the future of the prime minister’s official residence. The last prime minister to live at 24 Sussex Drive was Stephen Harper in 2015.

The NCC also owns and manages Stornoway, Rideau Hall, Harrington Lake, The Farm and 7 Rideau Gate.

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Rudy Mezzetta

Rudy is a senior reporter for and its sister publication, Investment Executive. He has been reporting on tax, estate planning, industry news and more since 2005. Reach him at