Owners of unoccupied homes in Milton could be hit with vacant home tax

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Published May 20, 2022 at 2:25 pm

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If you’ve ever noticed a vacant home in Milton and are curious about how Halton Region manages situations like these, you’re not alone.

While the real estate market in Milton is challenging enough, purchased homes that end up remaining vacant have proven to be yet another concern for prospective homeowners.

From lack of supply, competitive prices and bidding wars amid the ongoing housing crisis in Halton, many home seekers, particularly those looking to enter the market, may be questioning the fairness of homes purchased solely as an investment.

While there is currently no data available in terms of vacant homes that have been purchased for investment purposes in Halton, the Region is aware that there are various vacant homes in Milton, Burlington and Oakville.

So, how exactly is Halton Region handling situations like these?

The answer is by potentially implementing a vacant home tax for these homeowners.

At a recent Halton Regional Council meeting, staff reported the findings of the Vacant Homes Tax (VHT) Feasibility Assessment, which was conducted by Ernst & Young LLP (EY).

The assessment revealed that the implementation of a VHT in Halton would lead to a reduction in vacant homes.

Additionally, it revealed that it would result in revenues that could be invested to support Halton Region’s Comprehensive Housing Strategy (CHS) objectives.

According to Holly Einboden, Communications Specialist for Halton Region, the VHT is commonly implemented in high-growth urban centres that face challenges related to housing. This includes appreciating home prices at a rate higher than the growth of income or low availability of homes for sale or rent.

“As reported in Halton’s CHS Five Year Review, housing in Halton Region has become less affordable in both the ownership and rental markets and the cost of housing has outpaced household income,” Einboden told insauga.

Einboden also noted that the Ministry of Finance provides data on the Non-Resident Speculation Tax (NRST) collected in Ontario, which is a 20 per cent tax on the purchase or acquisition of an interest in residential property by individuals who are either not Canadian citizens or permanent residents or by foreign corporations and taxable trustees.

“The latest data available, from April 1, 2020, to June 30, 2020, shows that in Halton Region, there were 22 NRST payments for a total of $4.1 million in tax collected during this time,” Einboden told insauga.

As a result of the findings from the assessment, Halton Regional Council has asked staff to proceed with both the design and implementation study of a VHT program in Halton, which will begin through the collection of feedback from residents and stakeholders.

Engagement from a third-party consultant will then take place to develop the proposed VHT Program Framework.

Staff are set to report back to Halton Regional Council in 2023 with feedback from the public as well as the proposed VHT program framework for approval.

 

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