Ottawa city council to review final Residential Vacant Unit Tax report this spring

The final report on a proposed Residential Vacant Unit Tax is expected to come before Ottawa city council this spring.

Under the proposed framework, a residential property that is not the owner’s principal address and is vacant for more than 184 days during the calendar year could be subject to the new vacancy tax.

The tax is designed to motivate homeowners to occupy or rent their properties, in a bid to address the local affordable housing crisis. The net revenue collected from the tax is also expected to support the city’s affordable housing initiatives. 

The vacancy tax is expected to be calculated using a one per cent tax rate applied to the property’s MPAC assessed value.

At the beginning of 2023, pending council’s final approval in the spring of 2022, the City of Ottawa says all homeowners will be required to complete a declaration based on their property’s occupancy status during the 2022 calendar year. If a property is not a principal residence, the homeowner will be required to declare whether the property was vacant, rented, or qualifies for an exemption in 2022. If the vacancy period in the calendar year exceeds 184 days, a vacancy tax will be added to the 2023 final property tax bill.

Exemptions are being considered for the tax in the following circumstances:

• Death of a registered owner
• Property owner in a hospital or long-term care facility
• Arm’s length sale of the property
• Specific court orders prohibiting occupancy, sale, or rental of the property
• The property was undergoing extended renovations or construction

The city plans to audit declarations and properties each year. Staff will be expected to work with owners to review the accuracy of the property status and declarations. If it is proven false, the vacancy tax and penalties will apply.

Council approved the initial framework for the new Residential Vacant Unit Tax back in June of 2021.