Vacant Unit Tax
The City of Hamilton is introducing a Vacant Unit Tax (VUT) to address the affordable housing crisis. This measure aims to discourage property owners from leaving residential units vacant for extended periods, thereby increasing housing availability for those in need.
Property owners will face an additional tax of one percent of their property’s assessed value if a residential unit remains vacant for more than 183 days in a year. The revenue generated from this tax will fund City programs aimed at strengthening housing initiatives. Following the lead of Vancouver, Toronto, and Ottawa, Hamilton is implementing this policy.
Key points of the VUT include:
- Annually applying the tax to any residential unit vacant for more than 183 days in the previous calendar year.
- Requiring owners to submit a mandatory declaration each year regarding their property’s status; failure to comply will result in the unit being deemed vacant and subject to the VUT.
- Exempting principal residences from the VUT but still mandating a declaration.
- Deeming a residential unit vacant if the owner misses declaration deadlines or fails to provide required information. The VUT will be administered alongside property taxes.
The VUT will be administered and collected alongside property taxes.
Vacant Unit Tax Rate
If a residential unit is declared vacant for more than 183 days in the previous calendar year without qualifying for an exception, the Vacant Unit Tax (VUT) will be applied starting in 2025, based on the property’s status in 2024. The tax rate, set at one percent of the property’s assessed value, will be included in the Final Property Tax Bill issued in June.
Fees, Fines, Penalties & Offences
- Late Mandatory Declaration Fee: $250
- Non-Declaration Fee: $250
- Penalties and Interest: There is a penalty of 1.25% on the first day of default. With an additional 1.25% interest charged per month.
- Other offences as outlined in the by-law.
Exemptions from Vacant Unit Tax
Properties may be exempt from the Vacant Unit Tax under specific conditions:
- Death of an owner: Exemption applies for the year of death and the subsequent year.
- Major renovations: Valid building permits allowing major renovations or redevelopment that prevent occupancy for over 183 days in a calendar year.
- Sale of the property: Exemption in the year of sale if transferred to an unrelated individual or corporation.
- Principal resident in care, institutionalized, or hospitalized: Exemption during the period of residency in a hospital, long-term care, or supportive care facility.
- Court order: Exemption if a court order prohibits occupancy of the residential property.
- Non-profit housing: Exemption for designated housing projects owned and operated by non-profit corporations.
Key Dates
| DATE | DETAILS |
| December 2024 | Letter with declaration instructions will be mailed to property owners |
| March 31, 2025 | Mandatory declaration deadline |
| April 1 to April 30, 2025 | Late mandatory declarations will be accepted with a fee |
| First week of June 2025 | VUT charges will be included in the final property tax bill |
| June 30, 2025 | First VUT payment due |
| July 2, 2025 | Complaint period begins |
| September 30, 2025 | Second VUT payment due |
For additional information and FAQs, visit Hamilton’s Vacant Unit Tax webpage.
To read my previous blog post, click here.