Frank Carroll Team
Vacant Unit Tax
Vacant Unit Tax
Date Posted: January 18, 2023
Residential Vacant Unit Tax
The Residential Vacant Unit Tax (VUT) went into effect for Ottawa homeowners for the 2023 fiscal year. Homeowners must now annually declare their property status through Ottawa’s online portal. The program started off a little rocky with citizens being confused about the system and the online portal had issues on launch day, but it now seems to be working properly. Here is everything you need to know about the new tax:
The additional tax of 1% will only be required by homeowners whose properties remain vacant for more than 184 days. This excludes commercial, industrial, and multi-residential properties. Properties that are occupied as a principal residence, tenanted property, family members/friends using as principal residence or properties qualifying for one of the exemptions will not be subject to the tax but the owner still must declare the property status annually.
If your property is vacant for more than 184 days, the vacant unit tax will be added to the final tax bill in June. The VUT is subject to the same penalties for non-payment as property taxes, including the 1.25% interest added on the 1st of every month and the tax sale process. The unpaid VUT also forms a lien on the property. If you falsely declare your property status or fail to provide information when requested, you may receive a fine of up to $10,000 in addition to the payment of the tax.
The purpose of the VUT is to encourage homeowners to occupy or rent their properties, thereby increasing the housing supply. After the announcement of the Foreign Buyer Ban, the VUT could also discourage foreign buyers whom already own real estate from letting it sit vacant.
To read more about the newly added VUT, you can read here.