Conditions that led to Vacant Unit Tax must be addressed
By Wilson Lo, Barrhaven East Councillor
Vut’s up with the VUT?
On the surface, the Vacant Unit Tax (VUT) is desperately needed revenue to help cover gaps left by the upper levels of government in funding affordable housing initiatives.
Below the surface, the VUT assumes every homeowner in the city is guilty of exasperating the housing crisis by holding on to an unoccupied dwelling and places upon them a reverse-onus to declare and prove otherwise or face what’s a doubling of their property taxes.
To ensure fairness and consistency, taxation rules must be rigid, black-and-white, with no blurred lines. Grey areas cause all sorts of administrative problems.
As a result, the net cast by the VUT has snared homeowners across the city, including here in Barrhaven, who are facing unique and legitimate circumstances not covered by the exemptions. Though homeowners can prove their unique circumstance, the rigidity of the VUT means there’s no tangible way out of the unfair charge.
Although it’s not meant to be punitive, as some residents have shared, it has become just that in unique circumstances.
For example, one listed exemption is renovations with a building permit. Most minor renovations don’t require a building permit, but some minor renovations – like redoing every washroom at once or doing many minor jobs simultaneous – may make living in the home difficult enough to require alternate living arrangements. A range of factors may cause setbacks in the progress of the work, delaying the return of the resident until it’s complete.
Another listed exemption is a government order prohibiting the property from being occupied, except where neglect has caused that order. Pest removal is typically a quick, simple job, but the home cannot be occupied in the presence of chemicals used to complete the job until the company gives an all-clear. In rare circumstances, a job may take several months, and a homeowner may have to stay out of the dwelling, but that’s not a government order.
Last summer, I was part of a group of Councillors that attempted to cancel the VUT, but the motion lost.
Usually, matters defeated at Council can’t be discussed again in the same term without new information; but as each tax year’s data is considered new information, we will be able to reopen the matter this year.
Concurrently, Council also asked staff for process simplification and improvements, such as reducing the frequency of declarations and additional exemptions to account for some unique circumstances, if the VUT lives on.
To their credit, city staff have been receptive to feedback. For example, they have simplified the declaration form, improved the wording, and new this year, residents can complete their declaration(s) in person at a client service centre.
The opportunity to revisit the VUT will become available regularly as staff present data from each tax year to Council.
Affordable housing, including supportive units, absolutely needs better funding to ensure every resident can have both the roof over their heads and the ability to feed themselves and their families. However, that redistribution of income is supposed to be funded by income taxes.
It’s rich to place responsibility on another level of government, but the fiscal framework under which municipalities operate hasn’t been updated in about one hundred years. I would love for the city to fund and manage housing since we know our own communities best, but the fiscal framework must allow for that to happen.
However, we can’t always tax our way out of issues. The conditions that created the need for the VUT need to be addressed.
Residents may now complete their VUT declarations online through their My ServiceOttawa account, the city’s VUT webpage, or in person at a client service centre.
Those declaring through the city’s webpage should note both the property tax roll number and an access key will be required. Access keys are in the process of being delivered via snail mail and should arrive over the next two weeks.
