New tax to kick in for Hamilton homeowners with vacant homes


Published June 20, 2023 at 2:58 pm

(Photo: Habitat for Humanity)

Hamilton homeowners will soon be subject to a new tax if they choose to leave their residential units vacant.

In a bid to tackle the growing housing crisis and encourage property owners to address the issue of vacant units, the City of Hamilton has introduced a Vacant Unit Tax (VUT).

Starting 2024, a VUT will be imposed on properties that remain unoccupied for more than 183 days in a year.

And the revenue generated from this tax will be reinvested into the City’s programs aimed at alleviating the housing shortage.

By levying a tax at a rate of 1 per cent of the property’s assessed value,  on vacant units, will incentivize property owners to bring their units back into the housing market, ensuring a greater supply of available homes for residents.

How the tax works:

A letter with instructions on how to fill the mandatory declaration will be mailed to residential property owners by mid-December each year starting in 2023.

Owners need to fill in all the details and submit their forms by the end of March each year.

If home owners fail to declare their property or miss the deadline, they will be subject to a declaration fee of $250. Additionally, penalties and interest will be imposed for non-compliance.

A penalty of 1.25 per cent will be charged on the first day of default, followed by an interest rate of 1.25 per cent monthly.

However, the city offers exemptions for the vacant unit tax. These circumstances include the death of the owner, major renovations, sale of the property, and other specific cases where the property may be exempt from the tax.

The first year tax will be payable is 2024, based on the status of the property in 2023.

History behind the Vacant Unit Tax:

Earlier this year, the city council voted in favor (10-5) of creating a Residential Vacant Unit Tax Program.

Ward 8 Coun. John-Paul Danko drafted the motion, which was passed initially at a General Issues Committee meeting on January 18.

“No resident of Hamilton is going to be paying this tax, unless you happen to own two houses and decide to leave one of them vacant for more than half the year,” said Danko.

“That is a tiny number of very wealthy people who can afford to pay 1 per cent on the value of that house if they choose to leave it vacant for more than six months,” he added.

Prior to the vote, Ward 3 Coun. Nrinder Nann  said, “I am hopeful that this process will enable us to have those (vacant) homes identified, have those homes occupied.”

The decision to impose a vacant unit tax aligns Hamilton with other major Canadian cities such as Vancouver, Toronto, and Ottawa, which have already implemented similar measures to address their own housing crises.
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