Vacant Unit Tax
The City is instituting a vacant unit tax as one of the measures to address the City’s housing crisis. By creating a disincentive to have units remain vacant, the City aims to bring more housing online for those who need it. The City will be charging an additional one per cent tax on any home vacant for more than 183 days in a year, and that revenue generated from the tax can be re-invested into City programs.
The City has numerous other tools and programs to help make more housing available, including investments in affordable housing units, support for non-profit housing providers, rent subsidy programs, and investments in homelessness outreach and emergency shelters. Hamilton joins the cities of Vancouver, Toronto and Ottawa to implement a vacant unit tax.
The Vacant Unit Tax (VUT) is an annual tax payable by the owner of an eligible property that has been vacant for more than 183 days in the previous calendar year. All owners of eligible properties must submit an annual mandatory declaration on the status of their property. If a mandatory declaration is not submitted the property will be considered vacant and VUT will be charged.
A principal residence will not be subject to the VUT but it is still required to submit a mandatory declaration.
A residential unit may be considered vacant by the City and subject to the tax if the owner:
- failed to make a mandatory declaration by the prescribed deadline;
- made a false mandatory declaration;
- failed to provide information or to submit any evidence required by the City;
- provides false information or submits false evidence to the City; or
- if at least one unit within the eligible property is unoccupied.
The VUT will be added to the tax roll and collected in the same manner as property taxes.
Frequently Asked Questions
A residential unit is considered vacant if it has been unoccupied for more than 183 days during the previous calendar year.
- Mid-December 2023 Mandatory declaration mailed
- March 31, 2024 Mandatory declaration deadline
- April 1-30, 2024 Late mandatory declarations will be accepted with a fee
- First week of June 2024 VUT bills are mailed out with Final Property Tax bills
- June 30, 2024 First VUT payment due
- July 2, 2024 Complaint/appeal period begins
- September 30, 2024 Second VUT payment due
This tax will be in effect starting January 2024. A letter with instructions on how to fill the mandatory declaration will be mailed to residential property owners mid-December each year starting December 2023.
The declaration form will be submitted online, but a printable form will also be available on the City’s website to print off and fill out once the declaration period begins.
Declarations can be submitted beginning in January 2, 2024 and must be completed by March 30, 2024.
Late declarations will be accepted until April 30, 2024 and are subject to a $250 late fee.
All properties that are classified as Residential (RT class) that contain six units or less and that have a property code that is eligible as defined in the program framework.
The Vacant Unit tax program was approved by Council in June of 2022 as one of the measures to address the City’s housing crisis. By discouraging property owners from leaving units vacant, the City aims to bring more housing online at a time that housing is greatly needed.
The Vacant Unit Tax is calculated as a percentage of the property’s assessed value.
The council approved a tax rate of 1% of a property’s assessed value as determined by MPAC. For example, this would result in a $3,850 VUT tax on a residential unit with an assessed value of $385,000.
Properties which have been determined vacant will be charged the Vacant Unit Tax on their final property tax bill due in June.
The VUT is a tax, not a form of negative option billing.
The Federal Negative Option Billing Regulation applies to financial institutions, not municipalities. The regulations made under the Federal Bank Act and other federal acts apply to financial institutions, not municipalities.
Negative option billing applies to "consumer transactions," not taxes prescribed under the Municipal Act. The Municipal Act sets out the rules and authorizes a Municipalities' powers for taxation.
Finally, Part IX.1 of the Municipal Act (Optional Tax on Vacant Residential Units), provides powers to a Municipality to impose a vacant unit tax subject to being designated as a municipality that can impose the tax. O. Reg 458/22 designates Hamilton as a municipality that can impose the vacant unit tax.
- Vancouver’s Empty Homes Tax has been in effect since 2017
- Toronto and Ottawa have approved a vacant residential home tax beginning in 2023
- The Regions of Peel and York have submitted reports to their regional council discussing the feasibility of a vacant unit tax.
The property owner is responsible for submitting the declaration. A letter with instructions on how to fill the mandatory declaration will be mailed to residential property owners mid-December each year.
Staff have reviewed several residential vacant unit tax regimes globally to determine how residential vacant unit tax has been implemented. The regimes use one of three different methodologies:
- Mandatory Declaration
- Voluntary Vacant Unit Declaration: Property owners would voluntarily declare vacancy in good faith and be taxed by the City.
- Complaint-Based: Vacant properties would be identified through a complaint or tip from residents
In all cases, regimes that used the Voluntary Vacant Unit Declaration or Complaint-Based method have been ineffective in capturing vacant units and reducing vacancies in the cities. In comparison, those using the mandatory declaration have had much more success.
Yes, an annual declaration will be required each year. Declarations are required annually to ensure that the VUT is applied accurately and reflects any changes in how the property was used. The City does not have any reliable method to ensure all property occupancy changes are captured. The City will send a letter in December of each year to remind you to complete the declaration.
The City does not have access to that information as it is protected under the Municipal Freedom of Information and Protection of Privacy Act (MFIPPA). Further, water and hydro usage data would not accurately indicate how the property was occupied. For example, a principal residence could record low usage due to travel, work contracts, extensive renovations, military postings, or schooling.
Yes. Principal residences will not be charged with the tax, but still need to submit a declaration. If you are away during the declaration period (January through March) you can give authorization to someone else to fill the declaration for you.
Yes. A declaration must be submitted for each residential property roll number.
Yes. You must submit the status of each unit on your property. The City uses the MPAC property code to determine how many units are contained in a residential property.
No. Only one declaration is required for each residential property.
No. “Granny” or accessory suites do not require a declaration. The City uses the MPAC property code to determine how many units are contained in a residential property.
If you are away during the declaration period (January through March) you can give authorization to someone else to fill the declaration for you.
No, the Vacant Unit Tax only applies only to land with residential units. Vacant land under development is assessed by MPAC once an occupancy permit has been issued.
Although the Vacant Unit Tax applies only to residential property owners, we want to advise the entire community of this tax. While someone may be only renting today, they may be planning to buy a residential property, and if so, its is important they are aware of the tax.
Declarations are mandatory. Properties which have not declared will be determined vacant and be charged the Vacant Unit Tax on their final property tax bill.
If you believe that you should not pay the tax you can submit a Notice of Complaint.
A Notice of Complaint allows a property owner to dispute the city’s Vacant Unit Tax charge. Property owners can submit a Notice of Complaint after the tax has been charged. If the property is declared as a principal residence or occupied, the VUT and any related interest fee would be reversed.
If you disagree with the decision made on your Notice of Complaint, you can submit an appeal.
You cannot submit an appeal if you have not received the results of a Notice of Complaint.
All property declarations may be subject to audit. If your declaration is selected for audit, staff will contact you to request supporting documentation. If it is determined that the Vacant Unit Tax applies to your property, you will be billed.
Providing false declarations or false information can result in fines and penalties.
If you disagree with the decision of the audit, you can submit a Notice of Complaint.
The City conducted a Vacant Home Tax online engagement survey from September 7 to 30, 2021. The goal of the survey was to collect feedback from interested stakeholders on the need to implement a tax on properties that are left vacant for a certain period of time, as well as possible issues to consider in implementing the tax.