Many municipalities require all residential unit owners to declare the status of each unit, or these properties will be deemed vacant, with the possible application of a vacancy tax accompanied with penalties.
In response to escalating residential real estate prices, various Canadian municipalities, alongside the Federal Government and British Columbia provincial government, have implemented vacant residential property taxes. These measures aim to increase housing availability by discouraging property vacancies. This article provides a brief overview of these taxes as of early 2025. If you have any questions concerning these vacancy taxes or any other tax issues, please contact a Bateman MacKay Business Advisor for guidance. Subscribe to our blog and follow us on LinkedIn for additional updates on tax, accounting and business advisory matters.
Federal Underused Housing Tax (UHT)
The Federal Government introduced the Underused Housing Tax (UHT) effective January 1, 2022. This annual 1% tax targets foreign nationals and residential real estate owned by partnerships, trusts, and corporations held in part by foreign nationals that remain vacant for more than half the year. The deadline for 2024 UHT filings and payments is April 30, 2025.
Toronto – Vacant Home Tax (VHT)
- Implementation Year: 2022
- Criteria: Properties vacant for six months or more within the taxation year, with certain exceptions.
- Tax Rate: 3% of the property’s Current Value Assessment (increased from the initial 1%).
- Declaration Requirement: All homeowners (even if the home is your principal residence) must declare occupancy status annually by April 30th. Customer Number and Assessment Roll Number from a property tax bill are required.
Hamilton – Vacant Unit Tax (VUT)
- Implementation Year: 2024
- Criteria: Residential properties of six units or fewer, vacant for more than 183 days, not meeting exemption criteria.
- Tax Rate: 1% of the property’s assessed value.
- Declaration Requirement: All residential property owners (even if the home is your principal residence) must declare the status of each unit annually by April 30th. Access Code and Roll Number from a property tax bill or Notice to Declare letter are required.
Ottawa – Vacant Unit Tax
- Implementation Year: 2022
- Criteria: Properties vacant for an aggregate of more than 184 days within the year.
- Tax Rate: 1% of the property’s assessed value for each consecutive vacant year, up to a maximum of 5%.
- Declaration Requirement: Needed for most residential properties that contain six units or less, as determined by the property code on the tax bill. Due by the third Thursday in March. Late submissions accepted until April 30th with a $250 fee. Property tax roll number and access code or login to MyServiceOttawa account are required.
Windsor – Municipal Vacant Home Tax (VHT)
- Implementation Year: 2024
- Criteria: Properties vacant for more than 183 days (140 days between March 27 – December 31 in 2024 due to the tax’s approval date).
- Tax Rate: 3% of the assessed value.
- Declaration Requirement: Primary residence owners are exempt from filing. However, owners who know their property has been vacant beyond the specified period must declare it within 30 days of receiving notice from the city. The form requires a Roll Number and Tax Account Number.
Sault Ste. Marie – Vacant Home Tax
- Implementation Year: 2024
- Criteria: Properties vacant for more than 183 days, subject to certain exemptions.
- Tax Rate: 4% of the assessed value.
- Declaration Requirement:Residential property owners who know their property has been vacant for the required period must declare it accordingly, though no due date has been announced.
Vancouver – Empty Homes Tax (EHT)
- Implementation Year: 2018
- Criteria: Properties unoccupied for more than six months and not otherwise exempt.
- Tax Rate: 3% of the assessed value.
- Declaration Requirement: Vancouver homeowners are required to submit a declaration each year by February 2nd (or February 4th if the 2nd falls on a non-business day). A Folio Number and Access Code from a property tax bill are required.
British Columbia – Speculation and Vacancy Tax
- Implementation Year: 2018, with additional population centres added over time.
- Criteria: Applies to residential properties in specified areas (most major cities), including Vancouver.
- Tax Rates:
- 5% for Canadian citizens or permanent residents.
- 2% for foreign owners and untaxed worldwide earners.
- Exemptions: Several, including properties rented for more than six months.
- Declaration Requirement: All residential property owners in taxable areas must complete a declaration annually by March 31. A declaration letter will provide a Letter ID and Declaration Code required to declare.
Peel Region – Vacant Home Tax
- Status: On hold due to the region’s recent dissolution.
- Proposed Tax Rate: 1% of the assessed value for homes vacant more than 184 days.
