The City of Ottawa is putting in place the VUT (Vacant unit Tax). The Ottawa vacant home tax will take effect in January 2023 and will be applicable to non-principal residences that were vacant in 2022 for at least 184 days. This tax is intended to encourage owners to maintain, occupy, or rent their homes in order to enhance the supply of available housing.
The vacant unit tax, or VUT, in Ottawa can be significant. If your non-primary dwelling is vacant for more than 184 days in a calendar year and you own it in the City of Ottawa, you may owe 1% of the assessed value of the property in taxes. In addition to your current property taxes, you would now have to pay the Ottawa unoccupied home tax. For instance, if your Ottawa property is assessed at $1M, your annual tax cost for a vacant home would be $10,000.
Most residential property owners in Ottawa will need to report the status of their property(ies) every year starting in January 2023. According to the city of Ottawa, not all residential property codes require a declaration. The by-law specifies the list of eligible properties. You can check your most recent final tax bill to determine your property code. The reverse of the bill has the property code.
What kinds of properties are subject to the Ottawa Vacant Unit Tax?
Only properties in the residential tax class—as opposed to commercial, industrial, and multi-residential properties—that are considered vacant are subject to the VUT.
If a unit wasn't someone's main home and was empty for more than 184 days in the previous year, it will be considered vacant.
When is the declaration for Vacant Unit Tax due?
According to the city of Ottawa, Vacant Unit Tax filings must be finished by the Interim Tax due date every year and can be submitted starting in January. The cutoff date for 2023 is March 16.
Declarations submitted after April 30 will be charged a $250 late fee. To provide residents more time to finish their declaration in 2023, the late fee will be waived.
Property owners can follow this link to file their Declaration. You will need your Roll Number and Access Code, which can be found on your most recent municipal tax bill (top right hand corner).
You can also submit the Declaration by logging into your MyServiceOttawa account.
In what circumstances will the Ottawa Vacant Unit Tax apply?
If a house or apartment was empty for more than 184 days in the previous year, it is considered to be vacant. The following are exempt from the tax but still need a declaration:
- properties rented out as a principal residence
- properties used as the primary residence by a resident who is a family member, a friend, or another person
- Buildings that are eligible for one of the various exemptions
- What happens if my declaration is not turned in by the deadline?
You must submit a declaration for each property you own. The VUT will be added to the final property tax bill of any property that hasn't been declared as occupied.
Also, if you're selling your home, you have to give a declaration before the closing.
What if I travel abroad for a few months as a snowbird?
The tax does not apply if the property is your primary residence, but you still need to fill out a property declaration.
"Primary residence" refers to a person's main home. A person is only allowed to have one primary residence.
How will the City of Ottawa be informed when my home is unoccupied?
The city hasn't said what it will do to check on and enforce the status listed in the annual proclamation. On the other hand, the City of Ottawa's website says that it may check your declaration and ask for proof that the property is occupied. Incorrect statements or false information may be given in exchange for a $10,000 by-law fine.
Keep a watch out for the Vacant Unit Tax (VUT) declaration deadline of March 16, 2023, if you own property in the City of Ottawa. Keep in mind the City of Ottawa's unoccupied unit tax when thinking about purchasing a property in the City of Ottawa if you have a non-primary dwelling that will be vacant for more than 184 days in a year.
Here's a quick breakdown on how to complete the Vacant Unit Tax Declaration? Complete the residential Vacant Unit Tax online declaration today. It takes less than five minutes.
- Visit ottawa.ca/vut or login to your MyServiceOttawa property tax account
- Enter your roll number and access code in “property search”.
- Enter your name, phone number, and email in “contact information”.
- Choose whether the unit is your principal residence, occupied by tenants, a permitted occupant, or none of the above.
- If occupied by tenants or a permitted occupant, provide start and end dates of their occupancy in the previous year.
- If other, provide a reason for the vacancy – some circumstances may exempt you from the VUT.
- Verify your information in “summary”, and you’re done – a confirmation will be sent by email.
Have questions about whether this VUT will apply to your property, or whether you may qualify for an exemption? Our Realtors would be pleased to assist you with any inquiries.
What if you missed the City of Ottawa Vacant Unit Tax Declaration Deadline of March 16th, 2023?
Check out our blog post outlining next steps for you here.