City councillors look at scrapping new vacant unit tax
Council will decide if tax is ‘an unparalleled annual bureaucratic burden’
Some city councillors are looking to do away with Ottawa's new vacant unit tax, designed to crack down on livable homes that may be sitting empty for six months or more.
In the spring of 2022, council approved the tax, which will be used to fund affordable housing.
Those who have an eligible vacant property could be on the hook for the equivalent of one per cent of its assessed value — possibly thousands of dollars in taxes.
The tax doesn't apply to someone's principal residence, but homeowners have to go online every year and check the box telling the city their unit is occupied or risk paying a $250 late fee.
This latest motion, moved by Orléans West-Innes Coun. Laura Dudas and seconded by Osgoode Coun. George Darouze, will go before council on Wednesday and calls the tax "an unparalleled annual bureaucratic burden."
"It's creating too much [of a] headache and it's creating too much confusion for our residents,' Darouze said on Tuesday.
The councillor said he's worried for his rural residents who have unlivable farmhouses and now have to demonstrate to the city that no one can live in them.
"Every ward has different challenges," he said." And this is a citywide issue. I have to look at it from [the] perspective of what my residents [are] going through."
WATCH | Councillor says vacant tax unfair for rural residents with derelict properties
The motion from Dudas — who was unable to comment on Tuesday — says the tax disadvantages "seniors, snowbirds, deployed military service personnel, those with disabilities, new Canadians, those with limited access to computers" and others.
It also said that while city staff anticipated a vacancy rate of between 0.5 and 0.75 per cent, the city's preliminary numbers suggest far more units were declared vacant under Ottawa's criteria.
Motion seeks to have tax rescinded
The motion states the total number of properties deemed vacant by staff translates to a vacancy rate of 1.8 per cent, which far exceeds Toronto and Vancouver and is more than triple staff's original estimate.
"Either Ottawa is Canada's most vacant city by orders of magnitude, or more realistically, the [vacant unit tax] is being improperly applied to Ottawa residents," it reads, before calling for the tax to be rescinded and not be applied to properties this year.
Capital Coun. Shawn Menard said he won't be voting in favour of the motion, adding that staff have been flexible with units falling into grey areas.
"A vacant unit tax is one of the only tools a municipality has to deal with the issue of supercharged demand in the real-estate market from speculators and investors," he said.
While he agrees the city's vacancy rate may be higher than initially anticipated, Menard said it doesn't mean Ottawa isn't dealing with a vacancy problem that more rentals and funding could help alleviate.
"We're in the first year of implementation, these need to be audited to make sure that those numbers are accurate," the councillor said over Zoom.
"Indeed, there's still a lot of vacant units here where we have people without homes."
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