Vacant Unit Tax Information

The deadline to declare a property’s occupancy status for 2022 is March 16, 2023. Late declarations will be accepted until April 30th. In 2023, the late fee will be waived to provide additional time for residents to complete their declaration.

The mandatory declaration is primarily completed online directly in the on-line portal, through the Vacant Unit Tax home page on Ottawa.ca, or MyService Ottawa. It should take no longer than five minutes to complete.

Several options are also available to help residential property owners requiring assistance in completing the declaration, including seniors and persons with disabilities:

  • Call Revenue Services at 613-580-2444 and selecting option 3 to complete a declaration over the phone.
  • Book an in-person appointment at the Mary Pitt Centre at 100 Constellation Drive.
  • Call 613-580-2400 to contact the City using Canada Video Relay Service – which uses internet and mobile phone technologies to connect the caller with real-time sign language interpretation.

DECLARE OCCUPANCY STATUS NOW

VUT COMPLETION GUIDE

Note: A second notice was sent out in early January – which included roll number, access code and more information on how to declare. In order to meet the January 9, 2023 mailout date, these letters were generated prior to the end of the year, so those who have already declared will be included in the mailout. Property owners who have already completed the declaration can disregard the second notice.

Key Documents

June 2021 – Residential Vacant Unit Tax Report - As per direction from a motion passed December 9, 2020, staff present a proposal to City Council. Council direct staff to develop a residential vacant unit tax as described in the report.

 

March 2022 – Residential Vacant Unit Tax Report – Council adopts the program as outlined in the report.

 

Why a Vacant Unit Tax (VUT)?

Ottawa’s housing supply has grown tighter, and the rental and sale prices have risen dramatically over the past two years. This has created a struggle for residents and their families to find a place to live within a price range they can afford. Ottawa City Council declared an Affordable Housing and Homelessness Emergency in 2020. But since that time, the cost of living has also soared.

The residential vacant unit tax will encourage homeowners of secondary or investment properties – which are not the owner’s principal residence – remain occupied. This will motivate the property owner to maintain, occupy or rent their properties, thereby increasing the housing supply. The tax will also reduce the number of property standards issues.

The full allotment of net revenue generated from the program will be invested in affordable housing initiatives.

Our office published a note addressing why taxes like the VUT are important in achieving a fairer, more targeted, taxation system that can take pressure off of average residents, and cost them less over time. You can read that here.

Guiding Principles of the VUT

  • Increase the rental housing stock available in the market     
  • Fair and equitable approach
  • The least administrative burden to the City and its residents as possible

 

Public and Stakeholder Input

Key dates:

  • December 9, 2020: motion passed at City Council to study the residential VUT and report back on the feasibility
  • January 1, 2021 – April 30, 2021: Legislation review and benchmarking     
  • February 22, 2021: Survey launched
  • March 31, 2021: Survey closed
  • March 15, 2021 – April 15, 2021: Stakeholder consultations   
  • April 15, 2021 – May 15, 2021: Data analysis and review
  • June 8, 2021: Feasibility report tabled at Council

Consultation methods included:

  • Online survey
  • Written submissions
  • Stakeholder engagement (Ottawa Real Estate Board, Ottawa Small Landlord Association, Eastern Ontario Landlord Organization, and the Great Ottawa Home Builders’ Association)
  • Hard-copy surveys

The survey was promoted online, through social media and an insert in the interim water bill. It resulted in 3,540 survey participants, the highest ever completion rates for an Ottawa municipal engagement survey.

  • 77% supported the idea of a residential VUT
  • 70% agreed that the number of vacant homes in Ottawa negatively impacts the supply of affordable housing
  • 72% supported a tax rate of 1%

To read more: Vacant Unit Tax – What we Heard Report

 

Why is the City making this a Mandatory Declaration?

Staff considered three options to administer the program and conducted extensive research of several metropolitan cities around the world:

1 - Mandatory Declaration

Every homeowner in Ottawa would be required to declare to the City if their home is occupied or vacant each year. Residents who do not report their status to the City would be automatically deemed vacant. This approach is used in Vancouver, Hamilton, and Toronto.

2 - Voluntary declaration

Only those who own a vacant property in Ottawa will be required to declare. Homeowners who do not report their vacant status to the City could be subject to fines or penalties. This approach is used in the Melbourne metropolitan area in Australia with minimal compliance rates.

3 - Complaint-Based Enforcement

The City would only be able to identify a vacant property if they are notified through a complaint to the City. By-law services only has 156 vacant residential properties identified over time through complaints.

Of the three options, the survey responses showed that residents favoured the annual mandatory declaration.

Additionally, based on the City’s research, the mandatory declaration method will capture the highest number of vacant residential properties, and therefore the greatest impact on housing in Ottawa.

The chart below is an estimation of net revenues based on our research of the three proposed program models relative to the cost to administer the program. As you can see, the risk of proceeding with the voluntary declaration or complaint-based methods is that the City loses money administering the program while having little to no impact on affordable housing in Ottawa.

Program

Vacant Units (Year 1)

5-Year Revenue

5-Year Program Costs

Net Revenue

Mandatory Declaration

1,653

$33.2M

$(8.1M)

$25.1M

Voluntary Declaration

350

$7.0M

$(7.3M)

$(300K)

Complaint Based

250

$5.0M

$(6.8M)

$(1.8M)

The chart below compares other Canadian municipality programs:

 

Declaration Period / Extended Deadline / Grace Period for Fee

Beginning in 2023, property owners assessed in the residential tax class will be required to declare annually if their property was vacant for over 184 days in the prior year (2022). Principal residences will not be subject to the tax.

Residential properties that meet the vacant unit definition will be subject to the 1% tax applied to the MPAC assessment value. An estimated 330,000 residential property owners will need to declare their vacancy status annually.

The annual declaration period will open on January 1 and run through mid-March. Residents who have not declared their vacancy status by the end of this period will be charged a $250 late declaration fee. Recognizing that this will be a change management exercise, the late fee will not apply in 2023 and will instead apply beginning in 2024. Residential property owners will then be provided with an extended deadline which will expire at the end of April each year.

With robust communication on residents' obligations, Vancouver received more than 98% of the total required declarations in the first year of implementation.

 

Appeal Process / Audit of Declarations

Property owners that believe they should not have been charged the vacant unit tax will have a two-tier appeal process to dispute the charges. Properties that have been deemed vacant for failing to declare and charged the tax will have an opportunity to appeal the charge and file their declaration. The program will also have an audit component to it. Staff will audit declarations for accuracy on an annual basis. Where it is deemed a property was vacant, the tax will apply.

 

Exemptions

A principal residence may be unoccupied without being subject to the tax, for example snowbirds or extended travel. Other exemptions include

  • Death of a registered owner
  • Property owner in a hospital or long-term facility
  • Transfer of legal ownership in the previous year
  • Court order prohibiting occupancy, sale or rental of the property
  • Property was undergoing extended renovations or construction

The chart below provides a comparison of other major municipalities in Canada with a VUT:

 

Accessibility

We understand not everyone has access to a computer, tablet or internet access. Also, many residents require accessibility supports. The City is providing additional options and assistance to help residents complete the declaration, including:

  • A telephone number will be provided in January. People can call an agent who will complete the online form over the phone after you provide your roll number and access code and verify your personal information.
  • The Canada Video Relay service will also be available at 613-580-2400.
  • In-person appointments will also be an available option, along with services in other languages.

The City has also conducted targeted outreach to senior’s organizations to provide alternative declaration options and have conducted a presentation and question period with the Seniors’ Roundtable.

The City is also developing of a tax bill insert outlining information on accessible options that will be made available to residents requiring assistance with their declaration. Copies will be placed in ParaTranspo vehicles and other suitable locations, in consultation with the Accessibility Office.

Many of the communication items outlined below have been produced in several languages and strategically placed across the city.

 

Communications to residents

Pre-vacancy determination period (November 2021-January 2022)

Report to Committee and Council (Spring 2022)

  • Committee Update – FEDCO
  • Report to Council
  • Social media support
  • Feature Story – Vacant Unit Tax: An important tool to help increase Ottawa’s housing supply
  • Posters and Handouts were distributed to City recreation facilities, libraries, and Client Service Centres
  • Targeted outreach to property conveyance lawyers on VUT considerations for buyers and sellers
  • Targeted outreach to neighbourhood community and residents’ associations
  • Targeted outreach to seniors’ organizations
  • Several media interviews following pitch
  • Inserts in the property tax bill in 2022

Public Awareness & Questionnaire (Summer 2022)

Public Awareness (Fall 2022)

  • Letter to all residential property owners
  • PSA – Vacant Unit Tax notice to residential property owners 
  • Feature Story
  • A presentation and question period on the VUT at the Seniors’ Roundtable
  • Social media
  • Development of a tax bill insert outlining information on accessible options that will be made available to residents requiring assistance with their declaration. Copies will be placed in ParaTranspo vehicles and other suitable locations, in consultation with the Accessibility Office
  • Additional posters and handouts will be distributed to City recreation facilities, libraries and Client Service Centres in December 2022, with a reminder that the declaration period begins in January 2023.

Direct Communications

In addition, direct notices will be sent directly to residents to ensure the highest level of awareness and compliance

  • November 2022 - a notice sent to residents in November to create awareness of the tax and the requirement to declare.
  • Early January 2023 - A notice to all residential property owners advising that the declaration period is open and how to declare
  • Mid-February 2023 – a property tax bill insert reminding residential property owners to declare their 2022 vacancy status by March 16, 2022
  • End of March 2023 – a reminder to all residential property owners that have not declared by the March 16 deadline, that they must declare by the extended deadline of April 30, else they will be deemed vacant and billed the tax

Many more tactics planned when the declaration period officially opens in January 2023, including:

  • A public service announcement and associated media push
  • Social media
  • Online ads
  • OC Transpo exterior bus ads
  • Digital screens at City of Ottawa facilities
  • Radio ads in various languages
  • A demonstration on completing the declaration at the Seniors’ Round Table
  • A message included in water bills
  • A video on how to complete a declaration

In addition to the list of communications and reports listed above, the City also communicated to members of Council:

  • July 22, 2022 – Provide an update to Council on communication efforts and request their assistance in sharing our key messages
  • October 11, 2022 – Provide an update to Council on communication efforts and notify Council that the City will be sending a mail notice to residential property owners
  • November 22, 2022 – Chief Financial Officer sends a reminder email to Council that the City will be sending a mail notice to residential property owners along with relative documents
  • January 2022 – Advise that the declaration period is open and provide an update to Council on resident communications planned until May 2022.

 

Annual Reporting

Staff committed in the March 2022 – Residential Vacant Unit Tax Report to report back to Council annually on the program. Each year, City staff will provide data and results of the program through an annual report. Preliminary data for each vacant unit tax period will be provided in the subsequent year's annual tax policy report. A final report will be released in the second year through the tax policy report. This approach is consistent with how staff

currently report on charitable rebates, and vacancy rebates in the past. The final report will detail the amount raised by the vacancy tax, the number of declarations, results of the audit process supplementary billings, and the tax's impact with respect to the number of vacancies in Ottawa.

Should you require additional information or have questions regarding the VUT, please contact Joseph Muhuni, Deputy City Treasurer, Revenue Services.

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