The City of Ottawa Vacant Unit Tax: What You Need to Know in 2025

The City of Ottawa’s Vacant Unit Tax (VUT) continues to play a crucial role in addressing the housing supply shortage, encouraging property owners to occupy or rent their properties. The vacant unit tax, Introduced in January 2023, applies to non-principal residences that have been vacant for more than 184 days in a calendar year. Significant updates for 2025 aim to refine the program, introduce new exemptions, and strengthen penalties for repeat violations. Here’s everything you need to know about the Ottawa VUT for 2025 and how it impacts residential property owners.

How Does the Vacant Unit Tax Work?

The VUT charges 1% of a property’s assessed value for units vacant for more than 184 days in the previous calendar year. For example, a home assessed at $500,000 would incur a $5,000 tax if declared vacant.

New for 2025, the City has introduced a graduated tax rate for properties vacant for consecutive years. The tax rate increases by 1% per year of vacancy, up to a maximum of 5%. For instance, a property assessed at $500,000 and left vacant for three consecutive years could face a tax bill of $15,000.

Declaration Requirements and Deadlines

All residential property owners must declare the status of their properties for the previous year. The 2025 declaration period begins on January 2 and ends on March 20. Late declarations are accepted until April 30, subject to a $250 late fee. The City also introduced a late appeal option for 2025, allowing property owners to contest their status up to 15 months after the initial deadline, with a $500 administrative fee per assessed property.

Declarations can be submitted through various channels:

• Online at ottawa.ca/vut
• Via My ServiceOttawa for residents registered on the platform (link)
• By phone at 613-580-2444 (option 3)
• In-person at City of Ottawa Client Service Centres

Exemptions: What’s New in 2025

Several new exemptions have been added to the VUT program, expanding its scope to include:

• Rural ineligible properties: Examples include rural century homes, recreational hunt camps, and other structures deemed unsuitable for habitation.
• Hazardous properties: Properties rendered uninhabitable due to conditions beyond the owner’s control.
• Medical care residences: Secondary properties occupied due to medical care requirements.
• Retrofit renovations: A one-time exemption for properties undergoing renovations, provided the unit is occupied within one year.

These exemptions join existing ones, such as properties used as a principal residence, tenanted properties, or properties vacant due to construction, long-term care placement, or the owner's death. Full details on exemption eligibility are available on the City’s website.

Enforcement and Audits

The City of Ottawa reserves the right to audit property declarations and may request documentation to verify the accuracy of reported statuses. False declarations or misrepresentations can result in fines of up to $10,000.

The new My ServiceOttawa dashboard allows property owners to:

• View up to five years of VUT declarations
• Resubmit declarations
• Print or save declaration records
• Submit documentation for audits or appeals

Impact on Housing and City Revenue

The VUT aims to increase housing supply and stabilize market rents by incentivizing owners to occupy or rent their properties. Revenues generated from the tax are reinvested in Ottawa’s affordable housing budget. In its first full year, the program raised $12.6 million, with $10.3 million allocated to affordable housing projects. Administrative costs amounted to $2.28 million.

Key Takeaways for Property Owners

1. Meet the Deadline: Submit your VUT declaration by March 20, 2025, to avoid penalties.
2. Understand Exemptions: Ensure you review the latest exemptions to determine if your property qualifies.
3. Avoid Consecutive Vacancy Penalties: The graduated tax rate makes it costly to leave properties vacant for multiple years.
4. Be Prepared for Audits: Maintain accurate records and documentation to support your property’s status.
5. Consider Your Options: Renting out or occupying a vacant property can help you avoid the tax while contributing to Ottawa’s housing supply.

Final Thoughts

The Ottawa Vacant Unit Tax reflects the City’s commitment to addressing the housing crisis while generating revenue for affordable housing initiatives. Staying informed about updates and meeting declaration requirements ensures compliance and helps you avoid costly penalties. For more information and to complete your declaration, visit ottawa.ca/vut.

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