The city’s Finance and Economic Development Committee recently received a preliminary framework for a vacant unit tax program, which would help increase Ottawa’s housing supply by encouraging homeowners to occupy or rent their properties. That framework was approved today by City Council.
According to census data, in 2016, there were 1.34 million empty and temporarily occupied homes in Canada, with more than 20,000 of these located in Ottawa. In the midst of a housing crisis, and with growing concern for empty units in neighbourhoods across the city, this new framework is intended to help address the issue and deter property owners from leaving properties vacant for months on end.
Once the framework is adopted, owners of residential properties that are vacant more that 184 days per year would pay a one-per-cent tax as part of their final property tax bill each year. The tax would not apply to an owner’s principal residence. City Council have directed staff to develop a tax regime that would be implemented in 2022, with billing to start in 2023.
While a one-per-cent tax rate is estimated to bring in about $6.6 in revenue in its first year, the tax is not intended to be a major revenue generator for the city. In addition to returning more vacant properties to the housing market, it would also help reduce the amount of vacant homes with property standards issues, such as disrepair and dereliction.
I believe this is a positive step in addressing this growing issue and helping to return some of these homes to the market.