City prepares Residential Vacant Unit Tax for 2023

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The City is planning to implement a Residential Vacant Unit Tax (VUT) in 2023 based upon the occupancy status of a residential property. The proposed framework states that 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 VUT is designed to motivate homeowners to occupy or rent their properties, helping to address the affordable housing crisis. Further, the net revenue collected from this tax is expected to support the City’s affordable housing initiatives. Once implemented, the vacancy tax will be calculated using a one percent 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, 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 VUT 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 will audit declarations and properties each year. Staff will 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.

In June 2021, Council approved the initial framework for the new Residential Vacant Unit Tax. The final report (including approved rate and exemptions) and supporting by-law will be presented to Council for approval in the spring of 2022.

For more information on City programs and services, visit ottawa.ca, call 3-1-1 (TTY: 613-580-2401) or 613-580-2400 to contact the City using Canada Video Relay Service. You can also connect with us through Facebook, Twitter and Instagram.

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