You may have just received a letter from the City of Ottawa about the new (2022-2023) Vacant Unit Tax and be wondering how it affects you and what you need to do about it.

What is it?

The Vacant Unit Tax is a new tax the City of Ottawa is imposing on empty homes & residential units in order to encourage owners to use/rent them out to help deal with the housing crisis in Ottawa. If you have a housing unit empty for 184 days or more in a year you will need to pay a 1% tax with your normal property taxes the following year. All the taxes collected from this program are heard towards building new affordable housing units in Ottawa.

What do I need to do?

Each year between January and mid-March you will need to declare to the City of Ottawa whether your properties were vacant for 184 days or more. You can do that thru your normal My Service Ottawa account or by going to Ottawa.ca/vut.

If you do not make the declaration you will automatically have the 1% tax and a $250 fee added to your property tax bill from the city.

Exceptions

There are several exceptions to this, the most common are;

-Death of a registered owner
-Property owner was 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
-Extended renovations or construction
-Was used as a cottage rental with a valid permit for at least 100 days

Be sure to check the city website or consult a tax professional to make sure you get your declaration right as there can be an up to $10,000 fine for false declarations.