Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

Vacant Unit Tax: Offsetting the Demand for Housing in Ottawa

Vacant Unit Tax: Offsetting the Demand for Housing in Ottawa

By:

Posted March 21, 2022

The City of Ottawa’s Finance and Economic Development committee has approved a new vacant unit tax. The new tax is set to apply in 2022 and form part of final tax bills as of June 2023.

How does it work?

The tax is set to apply to residential buildings with up to six (6) units. The unit is considered “vacant” if it is not occupied by an owner or renter as a principal residence for more than 184 days (more than 6 months) for the previous calendar year.

Every owner of a building to which the tax applies will have to declare whether the property is considered vacant or not vacant based on the above definition. If vacant, there is a one percent (1%) tax payable on the assessed value of the property in the current year.

When does a property owner make the Declaration?

From the beginning of January to about the 3rd week of March, owners of applicable buildings are required to make the declaration, primarily through the City of Ottawa’s website. Failing to complete the declaration could result in a fine of $250.00. If no declaration is made by the end of April in the current year, the tax will apply.

Does the tax always apply if a unit is considered “vacant”?

There may be practical explanations as to why a unit is vacant. For example, a landlord may be renovating the property for a new tenant. Or, the property is being sold and the owner or tenant has already moved out. Another reason may be that the owner is unable to care for the property due to personal/medical reasons. These situations would likely exempt a property owner from paying the tax. If an owner is of the opinion that the tax was wrongfully applied, an audit and appeals period will open following the issuance of the final tax bill for the previous year.

How will the City validate the Declaration?

The City intends to confirm declarations made by owners through annual audits. Specific criteria will guide City staff to assist property owners in confirming the occupancy status of units.

Why is the tax being imposed?

The idea of a vacant unit tax is to change the mindset of owners who are holding property with no plan(s) of either living in the unit or permitting someone else to live in the unit. The goal is to increase supply of affordable living options in a competitive real estate market and use revenue from the tax to support affordable housing initiatives.

More information can be found at the City of Ottawa’s website.

This blog post was written by Brandon Doughty, a member of the Real Estate and Wills and Estates teams.  He can be reached at 613-369-0364 or at brandon.doughty@mannlawyers.com.

 

More Resources

Blog |
Employment, Labour, and Human Rights, Commercial Litigation

By: 

Posted May 23, 2023

Both in my commercial and employment litigation practice, I encounter Ontario business owners faced with serious charges laid against them under the Provincial Offences Act[...]
Blog |
Family Law

By: 

Posted May 18, 2023

The recent Supreme Court of Canada decision in Anderson v. Anderson, 2023 SCC 13, provides guidance on domestic contracts and the enforceability of an informal[...]
Blog |
Environmental Law

By: 

Posted May 16, 2023

When many people think of contaminated sites, they think of the usual suspects such as industrial properties and gas stations.  They may not think of[...]
Blog |
Business Law

By: 

Posted May 9, 2023

Often business owners reach a point where they are considering the sale of their business either through the sale of shares or the sale of[...]
Blog |
Family Law

By: 

Posted May 2, 2023

Overview of Tort Claims in Family Matters Tort claims can be made in family law matters, so as to prevent a multiplicity of proceedings and[...]
Blog |
Employment, Labour, and Human Rights

By: 

Posted April 25, 2023

In a case that recently was decided from the Court of Appeal of Ontario called Celestini v Shoplogix Inc., 2023 ONCA 131, the Court had[...]

Subscribe to Our Newsletter

"*" indicates required fields

Name*
Consent*
This field is for validation purposes and should be left unchanged.