City’s new vacant unit tax by-law aims to increase housing supply

HAMILTON, ON - A new City of Hamilton residential Vacant Unit Tax (VUT) by-law aims to increase the supply of housing in the City by encouraging residential property owners to keep their properties occupied rather than vacant.

“In the face of a declared housing crisis, it is unacceptable for there to be units sitting vacant in the City of Hamilton, which is why I am so pleased to see Council’s reconsideration and approval of the vacant unit tax,” said Mayor Andrea Horwath. “The vast majority of Hamilton property owners won’t pay this tax, but the benefits will be felt across the city. We are doing everything we can to increase the availability and affordability of housing, and the VUT is one of many tools being used to address the unprecedented housing crisis facing our city.”

The new by-law requires property owners to submit a declaration to the City at the beginning of each year regarding the occupancy of their residential properties.

Beginning in 2025, non-exempt vacant residential properties will be charged one per cent of the property's assessed value, which will be added to the tax roll and collected the same way as their property taxes. Net revenue generated from the tax will be reinvested into affordable housing initiatives.

The VUT declaration period will be open from January until March 31 of each year, starting in 2025. Property owners will receive a letter from the City of Hamilton in December of the prior year with instructions on how to submit their declaration and submission deadlines.

All residential property owners will be required to submit the occupancy declaration, which is based on the previous year’s occupancy status. It applies to all properties that are classified as residential (that contain six units or less) and have a property code that is eligible as defined in the by-law.

A residential unit will be considered vacant if it has been unoccupied for more than 183 days in the previous calendar year or is deemed to be vacant under the by-law.

However, there are some exemptions, including principal residences, owners of eligible non-profit housing units, death of the owner, homes under renovation, sale of the property or if the owner is in medical care.

“While the primary goal of this tax is to influence property owners’ decisions regarding vacant units, any net revenue generated from this tax will go toward more housing options for Hamilton residents,” said Brian McMullen, Director, Financial Planning, Administration and Policy for the City of Hamilton. “Property owners who choose to keep their units vacant will be required to pay a tax as a result.”

Following the declaration period, properties may be selected for audit, and if selected, the owner will be required to provide proof of the residential unit’s status for the year it was declared. The by-law will include provisions for non-compliance such as penalties for failure to pay, fines for various offences and a dispute resolution process.

This new by-law updates a previous version considered by Council in 2023.

The community will continue to receive ongoing communications before and throughout the declaration period including updates to the City's website, social media channels and in local advertising.

Quick Facts

• The City conducted a Vacant Home Tax online engagement survey in September 2021. More than 91 per cent of respondents supported the idea of a Vacant Home Tax or Vacant Unit Tax (VUT). 
• Hamilton’s residential VUT program and by-law are similar to those created in Toronto, Ottawa and Vancouver.
• Property owners will be able to make the declarations online or by phone. A print form will also be available upon request.