The City of Ottawa's Vacant Unit Tax (VUT) could get tougher, with increasing penalties for properties that remain unoccupied for multiple years. According to a report prepared for a joint meeting of the Finance and Corporate Services and Planning and Housing committees on Nov. 6, strengthening the VUT was one of the commitments the City of Ottawa made in exchange for a deal with the province to provide the city with $543 million in funding.
"Strengthening the VUT is a priority not just to support the province's funding deal but also to ensure that housing is not underutilized during a housing crisis," the report says. "The tax ensures homes remain occupied and unoccupied homes are returned to the housing supply." The VUT was implemented by council in 2022 to encourage homeowners to occupy or rent their properties to address the affordable housing crisis in the city.
All revenue collected from the tax will go into the city's funds for more affordable housing. Properties that are declared vacant for more than 184 days in the previous calendar year are charged an extra 1 per cent of assessed value on their final property tax bill. According to the joint committee report, city staff are considering implementing a graduated VUT rate that increases by 1 per cent a year for repeat vacancies, up to a maximum of 5 per cent of assessed value.
Updating property eligibility codes would also add approximately 1,200 more units to the rolls. Staff say adding a graduated tax rate would gene.