Vacant Unit Tax
As most residents are now aware, residential property owners in the City of Ottawa are now required to submit a declaration of occupancy, which determines whether or not those properties are subject to the newly launched Vacant Unit Tax. Ever since residents received their first notification on this last December, and especially since the online declaration portal opened on January 4th, our office has received a significant number of emails and phone calls about this. We've received a diverse array of responses, as you can imagine: some positive, many negative, others simply confused about the process.
All property owners must submit declarations for their property/properties between January 4th and March 16th. Failure to submit the declaration by the deadline may result in the Vacant Unit Tax being applied. Late declarations will be accepted until April 30 and will be subject to a $250 late fee. For 2023, the late fee will be waived to provide additional time for residents to complete their declaration.
Certainly, this is a new and unusual way of administrating a program in Ottawa, especially a tax. It will take some getting-used-to. But it's important to remember the objectives behind this new initiative, which is that it's a tool to help address our city's housing crisis. Not only does this new program incentivize owners of vacant properties to get their properties on the market - and thereby increasing Ottawa's housing supply - but it will also generate significant revenue to support affordable housing initiatives.
The City of Ottawa has implemented this model of mandatory declaration because they are confident that it's ultimately the best means possible to get up-to-date, complete and accurate data. The City has researched Vacant Unit Tax models in Canada and around the globe. The mandatory declaration by property owners has proven to be the most successful model. Alternative models such as voluntary declarations or complaint-based were found to be ineffective, inefficient and inequitable to property owners.
The good news is that the process of submitting your declaration is quite simple, with several options for how to declare, based on your access needs. In fact, as of January 30th the City has received more than 220,000 submissions, which means that more than 70% of residential properties have declared. They City has also produced a useful video for "How to complete the Vacant Unit Tax declaration".
There are several methods that can be used to register your property, with most declarations going through the online declaration portal. You can also submit your declaration by phone. All of the necessary instructions and information is detailed in the second notification letter that was sent to residents this week.
Residents should also note that the program is financially self-sustaining (i.e., the program generates more revenue than it costs to operate). The current projections are that Vacant Unit Tax program will generate $25M in additional revenue over 5 years, to be allocated to affordable housing initiatives.
While I am generally supportive of the objectives of the Vacant Unit Tax - which means that I do believe that vacant units that do not qualify for exemptions should be subject to this tax - I also share the concern of many councillors and residents that the communications and delivery process for this new program could have been better handled from the outset. However, the more recent communications tools have certainly improved the process. My most important concern, though, is to protect residents from being unfairly penalized for failing to submit their declaration; or even worse, for being unfairly charged an expensive tax. For these reasons, my office will be looking closely at the findings from this initial year of the program to seek improvements in targeting and delivery.
If residents have further questions on this matter, please email our office at [email protected]
