What is the Vacant Home Tax in Hamilton?

This article was originally published by The Hamilton Spectator.

Q: What is a Vacant Home Tax and how does it impact estate administration?

A: Hamilton’s City Council has approved a Vacant Home Tax that will come into effect in 2024. This will mean that owners of residential properties that are underused or not used as the owner’s principal residence in 2023 (or any year after that) will have to pay an additional tax. The City of Toronto already has a similar rule where vacant properties are subject to a tax equal to one per cent of the property’s current value assessment.

A property is deemed “vacant” if it’s unoccupied for more than six months during the previous calendar year or is otherwise deemed vacant under the bylaw. Residential property owners are required to make the declaration each year and might also be subject to an audit by the City to verify the occupancy status of the home.

Typically, there are a few situations where this rule does not apply. Some examples include when a property is vacant due to the owner’s death, if the occupant is in a health-care facility, or if there is ongoing litigation that prevents the home from being sold or rented. The complete framework for the new tax will be presented to the City Council early this year.

This tax could impact estate administration if there are delays due to litigation or a delay in obtaining a Certificate of Appointment of Estate Trustee with/without a Will. If an estate property remains vacant for a long time, this new tax could be applied. An estate trustee is responsible for the timely payment of all property taxes and fees.

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