Hamilton is going ahead with new vacant homes tax. Here's what property owners need to know | CBC News

· Posted: Apr 25, 2024 4:16 PM EDT | Last Updated: April 25

Hamilton will go ahead with its vacant unit tax, following a procedural vote by city council on Wednesday.

"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," Mayor Andrea Horwath said in a news release Wednesday. 

The proposal was unexpectedly struck down in late 2023, but councillors revived the policy in January, passing a motion to approve a vacant unit tax bylaw 9-6, with Horwath abstaining because she owns unoccupied property.

The bylaw passed by the same margin Wednesday. 

An additional one per cent tax, on the assessed value of one's home, will apply to resident's property taxes in 2025 if they own a vacant property. The bylaw will require all property owners to formally declare their property's status annually between January and March 31. 

The city will consider a unit to be vacant if it was unoccupied for more than 183 days in the previous calendar year, or if the bylaw deems it so, the city said.

The policy "aims to increase the supply of housing in the city by encouraging residential property owners to keep their properties occupied," and that revenue will go toward affordable housing, the media statement read.  

The point is to discourage investors from buying homes and letting them sit empty instead of renting them out to long-term tenants, city staff have said. 

Toronto example concerned some councillors

The city said residents will be reminded in December to submit their property status and how to do so, but at this week's council meeting, putting the onus on residents was a matter of debate. 

In Toronto, where a similar tax has been implemented, the city received tens of thousands of complaints once homeowners started receiving their tax bills. Some said they forgot or didn't know to declare, and others said they declared their properties were occupied but got charged anyway.

Toronto recently announced it will revise its program, with Mayor Olivia Chow calling the situation a "mess."

In Hamilton on Wednesday, Coun. Esther Pauls (Ward 7) expressed concern that even after public outreach there could be confusion. 

"People still don't understand … why they have to do the work every year and say 'Yes, my house is occupied,'" Pauls said. 

City staff have repeatedly consulted with Toronto about its tax, as well as Ottawa and Vancouver, which also have vacant unit taxes, Hamilton's general manager of finance and corporate services, Mike Zegarac, told councillors.

"We will continue to learn from their experiences," he said, adding that Hamilton could notify residents differently, for example.

At least one group representing landlords and property managers in the region has also expressed opposition to the policy. In a letter to council, Daniel Chin, president of the Hamilton and District Apartment Association, wrote the vacant home tax will be a "train wreck," and collect too little revenue to make much of a difference.

"More taxes discourage investment in cities," Chin wrote. 

Meanwhile, Coun. Mark Tadeson (Ward 11) said he asks concerned constituents: "Would you be willing to spend five minutes a year to possibly bring on hundreds of units in the Hamilton market to help with the housing crisis? … They all support that."

The city has said there will be some exemptions to the new policy, such as if the owner goes into medical care or dies, or if they are renovating or selling.

Officials have said over 1,000 property owners will be taxed, generating over $4 million in revenue in the program's first year.

City staff say residents will be able to declare online, by phone, or online, and that the city could change the rate in future years.

How council voted

For: M. Wilson, Kroetsch, Nann, Hwang, Danko, Tadeson, Cassar, Wilson, McMeekin

Against: Francis, Jackson, Pauls, Clark, Beattie, Spadafora

Abstained: Horwath

ABOUT THE AUTHOR

Justin Chandler is a CBC News reporter in Hamilton. He covers all sorts of stories but has a special interest in how public policy affects people. Justin covered current affairs in Hamilton and Niagara for TVO, and has worked on a variety of CBC teams and programs, including As It Happens, Day 6 and CBC Music. He co-hosted Radio Free Krypton on Met Radio. You can email story ideas to justin.chandler(at)cbc(dot)ca.

• More by Justin
• Follow Justin on social media

With files from Samantha Beattie