Tax Season for Ontario Property Owners: 3 Things You Need to Know Right Now

If you own property in Ontario, tax season probably brings a mix of emotions. Relief that another year is behind you. Anxiety about whether you're doing everything right. And maybe a little bit of "I really should have been paying more attention to this stuff."

You're not alone. We talk to clients every week who are navigating the intersection of mortgages, taxes, and property ownership. And here's the thing: what you don't know can cost you. Not just in dollars, but in stress and missed opportunities.

So let's break down three tax-related updates that Ontario property owners should have on their radar as we head into 2025 filing season.

1. Capital Gains Rules Are Staying Put for 2025 (But Don't Get Too Comfortable)

You may have heard rumblings about the federal government increasing the capital gains inclusion rate. There was a lot of noise about this in 2024. The good news? Any increase has been deferred until at least January 1, 2026. That means the current rules are in place for your 2025 filings.

The principal residence exemption also remains unchanged. If you're selling your primary home and you've properly designated it as your principal residence, most homeowners won't pay capital gains tax on that sale.

Why this matters for you: Stability is great, but it doesn't mean you should coast. If you're thinking about selling an investment property, a cottage, or any property that isn't your principal residence, future changes to capital gains rules could affect your plans. This is one of those situations where planning ahead still matters. Talk to your accountant now, not when you're already mid-sale.

2. The Underused Housing Tax Is Still a Thing (Even If They're Talking About Scrapping It)

The federal Underused Housing Tax (UHT) was introduced to target vacant or underused residential property, particularly involving non-resident or corporate ownership. You might have heard the government has proposed repealing this tax for future years.

Here's the catch: until those changes are fully enacted, filing obligations remain relevant for prior periods.

Why this matters for you: Missed filings can result in penalties, even if no tax is ultimately payable. We've seen this trip up property owners who assumed they didn't need to worry about it. If you hold property through a corporation, trust, or partnership, or if you're a non-resident, this is worth a conversation with your tax professional. Better to check and be sure than to get an unexpected letter from CRA.

3. CRA Is Paying Close Attention to Real Estate (Yes, This Includes You)

Beyond any single tax rule, there's a broader trend happening: real estate remains a compliance focus for the Canada Revenue Agency. They're looking more closely at rental income reporting, expense deductions, principal residence claims, and GST/HST treatment on property sales.

If you own a rental property, run an Airbnb, or have sold property in the last few years, your situation may be getting more scrutiny than you realize.

Why this matters for you: Tax season isn't just about filing. It's about making sure your past and current real estate positions align with how the rules are actually being enforced. This is especially important if you're self-employed and claiming home office expenses, or if you've converted a personal residence to a rental (or vice versa). These situations can get complicated fast.

What Does This Have to Do with Your Mortgage?

More than you might think.

Your tax situation directly impacts your mortgage options. If you're self-employed and writing off aggressively to minimize taxes, that same strategy might limit what you can qualify for when it's time to buy or refinance. We've seen clients shocked to learn that their tax-savvy approach created a mortgage qualification problem.

That's why we always say: your mortgage broker and your accountant should be talking to each other. Your mortgage is part of your bigger financial picture, not a separate thing you deal with every five years at renewal time.

Want to Dig Deeper?

Here are the official government resources for more details:

Capital Gains: canada.ca/capital-gains

Principal Residence: canada.ca/principal-residence

Underused Housing Tax: canada.ca/underused-housing-tax

Let's Talk

If you're wondering how any of this affects your mortgage situation, whether you're buying, refinancing, or just planning for the future, we're here to help you figure it out.

Our advice is free and could save you thousands. We work with 60+ lenders to find you the best fit, and we treat our clients like family. That means being honest, even when it's not what you want to hear, and making sure you understand your options before making any decisions.

Never be too shy to call. Let's look at the whole picture together.

Your mortgage... rethought.