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Does Halton need a vacant home tax?

Nearly 5,000 homes sitting empty, says report from regional staff
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A vacant home tax (VHT) for Halton will be up for debate when regional councillors meet on April 20.

The tax could add more badly needed properties to the region’s housing supply by encouraging owners to rent, sell or occupy vacant homes, says a report by Halton regional staff. It adds that the revenue raised could be directed toward affordable and assisted housing initiatives.

But while regional staff recommend moving ahead with the tax, they’ve laid out a plan that will cost $300,000 and could take up to two years to implement.

Last year, the region commissioned consultant Ernst and Young (EY) to report on the feasibility of a VHT in Halton.

Based on water usage data, EY estimates that 4,700 homes in the region sit vacant. Many of those homes would be exempt from the tax, but the report projects that 985 would be subject to a VHT.

It also projects that over a 10-year period, the tax would encourage owners of 330 vacant homes to sell or rent their properties.

“Vacant homes in our neighbourhoods are a source of concern to residents who see poorly kept homes that provide no benefit to their community,” says Ward 6 councillor Tom Adams.

“A VHT would both help reduce the number of these darkened homes while at the same time help create a stream of more affordable housing for those who want to live in and add to our strong community.”

As a starting point for discussion, regional staff suggest a VHT could be set at 1 per cent of a home's assessed value. It would be levied along with the annual residential property tax.

Although Toronto began levying such a tax in January, regional staff say several years of consultation and planning are needed to make the tax a reality in Halton.

It will take that long to consult with the public, design the tax policy and a framework for implementing it, and get approvals from regional councillors and the province. It's also expected to cost up to $300,000 in consulting fees to develop the plan.

The report says a realistic expectation is that the tax would be levied in 2024 and collected in 2025, although the best-case scenario could happen a year earlier.

Mandatory declaration of occupancy?

In 2017, the province gave municipalities the right to apply to impose a tax on vacant residential units. While only Toronto currently has authority to do it, the staff report says Ottawa and Hamilton are also working through the approvals process to begin collecting tax next year.

Toronto levies the tax against properties that are unoccupied for longer than six months, but offers exemptions for snowbirds and vacancies related to renovations, property sales or medical circumstances.

As part of an implementation plan, the region would need to address:

  • How to identify vacant homes? Possibilities include a mandatory declaration of vacancy status by all homeowners, self-declaration by vacant homeowners or a complaints-based system.
  • Collections and compliance approach. Investigations and penalties for non-compliance are possible considerations.
  • Communications to build awareness of the program and answer questions, complaints and concerns.
  • Complexities of implementation in a two-tier municipal structure.

Assuming a 1 per cent VHT, the report estimates annual revenues of $6.1 million (made up of $5.8 million in tax levy revenues and $300,000 in penalties) for the first decade of the program. 

However, it could cost the region as much as $3.9 million to implement the program and another $2 million annually to operate it.

Region of Halton
Region of Halton

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