Ontario Construction News staff writer
OTTAWA – The City of Ottawa has opened the declaration portal for the 2024 Occupancy Year of the Vacant Unit Tax (VUT), alongside a new report suggesting the policy has unlocked housing supply equivalent to more than $400 million in new construction capital.
In a memo to Mayor Mark Sutcliffe and City Council dated Dec. 15, Deputy Treasurer Joseph Muhuni confirmed that the declaration period formally begins Jan. 1, 2026, though the portal is available immediately for early submissions.
For the city’s construction and development sector, the 2023 Annual Report offers a stark metric on the trade-off between building new units and utilizing existing stock. According to the report, 1,602 previously vacant units were returned to the housing market between 2022 and 2023.
“Achieving the same housing supply increase through new construction would require approximately $400.5 million in capital investment at a cost of $250,000 per unit,” the memo states.
Revenue and housing allocation
The VUT program generated $14.3 million in revenue in 2023, a $2.5 million increase over the previous year. Net proceeds are restricted to the city’s Affordable Housing reserve.
Through the 2024 budget, $10.8 million of this funding has been allocated to projects including 148 rental units and 33 homeownership units. Since the program’s inception in 2022, more than $20 million has been directed toward affordable housing initiatives.
New graduated rate structure
While the program has successfully reactivated over 1,600 units, the data revealed a cohort of “resistant vacancies” that a flat tax rate failed to motivate. The report identified 2,067 properties that remained vacant for two consecutive years.
To address this, the city is implementing a new graduated rate structure, approved by Council on Nov. 13, 2024.
Starting with the 2024 occupancy year (declared in early 2026), the tax rate remains at one per cent for first-year vacancies but will now increase by one per cent annually for properties that remain vacant, capping at five per cent. This escalation model mirrors strategies already in use in Vancouver and Toronto.
“The adoption of the graduated rate structure positions the City of Ottawa at the forefront of this policy evolution, moving from a simple deterrent to an escalating model that recognizes different owner motivations,” Muhuni wrote in the memo.
Audit crackdown
The city has also significantly ramped up enforcement. An enhanced audit program completed 7,053 audits in 2023—a 40 per cent increase from 2022.
These audits identified 1,244 vacant units that property owners had failed to declare, representing a 126 per cent increase in audit-identified vacancies compared to the previous year. These findings accounted for 60 per cent of all newly identified vacancies in 2023.
Key dates for property owners
- Portal Open: Available now at ca/vut
- Formal Declaration Period: Opens Jan. 1, 2026
- Deadline: March 19, 2026
- Late Declarations: Accepted until April 30, 2026 (with a $250 fee)
Property owners can submit declarations via My ServiceOttawa, online at the city’s website, by phone at 613-580-2444, or at Client Service Centres.
