Ottawa landlord may be on the hook for new vacant unit tax

Written by Peter Szperling

CTV News Ottawa Multi-Skilled Journalist

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Published March 13, 2023 7:12 p.m. EDT

If you haven’t filled out your vacant unit tax declaration, the deadline is coming up this week. But it hasn’t been a smooth process for everyone.

Roland Reebs is a landlord and says he may be on the hook for the city's new vacant unit tax even though his property is occupied.

“They basically told me that my application for exempt status was denied,” he told CTV News Ottawa.

Reebs owns a semi-detached home, and while there are tenants living in the unit now; the home was empty for a part of last year. Reebs said that's because of damage that happened under the previous tenants.

7 per cent of Ottawa homeowners have not submitted vacant unit tax declaration.

Day one of the vacant unit tax declaration leaves residents confused, angry and some offline.

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“The house was badly damaged, appliances were broken," he said. "The place was trashed, there were big holes in the walls."

Reebs provided CTV News with pictures of the damage, which include a hole cut in the backyard fence and trash throughout the home. He says the furnace filter was clogged with spray paint too.

“The walls were painted in a dark colour; they had syringes all over the shelf unit behind the bed.”

Repairs had to be made before renting the unit out again. But he works full-time, faced some supply chain issues with materials, then needed to find a suitable tenant. All of that took time, leaving the place empty.

“At the same time, it was costing me money. I had to pay utilities, I have a mortgage; so, I was worried about getting the place into a condition whereby it could be rented,” he said.

“But the city doesn’t want to hear any of that, they’re not interested in it.”

Reebs plans to appeal, and has been communicating with the city about his situation.

Under the new rules, if a home is vacant for more than 184 days in the previous calendar year, the new tax applies at one per cent of the properties assessed value, unless it meets an exemption - like major renovations. But Reeb’s work didn’t require a permit, he says, so he isn't eligible.

As of Monday morning, about 305,000 Ottawa residents have submitted the information required by the city's vacant unit tax as the deadline approaches this Thursday. That represents about 94.5 per cent of the properties required to submit declarations under the new tax, which will see vacant properties assessed an extra one per cent tax this year.

City council voted last March to impose the tax, a move designed to address homes sitting empty and neglected.

Property owners are required to submit annual declarations indicating their home's occupancy status, even if it's their principal residence. Any property that's vacant for more than 184 days in a year will be taxed an extra one per cent.

The city has sent letters and emails with information on how to submit the information. But they are doing more outreach next week to capture the seven per cent of homeowners who haven't filled out their declarations yet.

Clinics are scheduled this week for people who don't have a computer or electronic device, or just aren't sure how to fill it out. City staff will offer one-on-one service to help people file their declarations at the clinics.

"No reservations are required, and you just need to bring your roll number and access code found on one of the VUT information letters or your last property tax bill," the city said in a news release Thursday.

The deadline for declarations is Thursday, March 16. Homes that don't have declarations filed will be deemed vacant and assessed the tax. There is also a $250 late fee, but the city is waiving that this year.

The late declaration due date is April 30. After that, if the declaration hasn't been submitted, the one per cent tax will be applied for 2023.

Many city councillors had an earful from constituents when the tax was passed, with people calling it a negative-option rule. There was also some uncertainty about its rollout date.

However, City staff estimate the tax could raise $25 million over five years. The funds will go toward funding affordable housing initiatives.

Here are the locations, dates and times of the remaining clinics this week:

               Tuesday, March 14: Ottawa City Hall, 110 Laurier Ave. W., Jean Pigott Place, 11 a.m. to 5 p.m.

               Wednesday, March 15: Hintonburg Community Centre, 1064 Wellington St. W., 11 a.m. to 5 p.m.

               Thursday, March 16: St. Laurent Recreation Complex, 525 Coté St., 11 a.m. to 5 p.m