Vacancy Tax Rebate & Reduction Programs

Consultation has concluded

The City is considering making changes to its Vacancy Tax Rebate and Reduction Programs to better encourage the use of vacant properties in support of vibrant and sustainable communities.

The City currently provides tax relief to property owners with vacancies in commercial and industrial buildings. A property owner may apply to the program to receive 30 per cent (commercial properties) and 35 per cent (industrial properties) of total property taxes on vacant portions back from the municipality. A property owner can apply for a rebate once his/her property has been vacant for 90 days and can collect the rebate for

The City is considering making changes to its Vacancy Tax Rebate and Reduction Programs to better encourage the use of vacant properties in support of vibrant and sustainable communities.

The City currently provides tax relief to property owners with vacancies in commercial and industrial buildings. A property owner may apply to the program to receive 30 per cent (commercial properties) and 35 per cent (industrial properties) of total property taxes on vacant portions back from the municipality. A property owner can apply for a rebate once his/her property has been vacant for 90 days and can collect the rebate for as long as it remains vacant. This rebate is paid for as part of the overall tax levy and the 2018 operating budget includes $950,000 for the cost of the Vacancy Tax Rebate program.

The Province is also allowing for potential changes to the Vacant/Excess Land Property Tax Subclass reductions.

Commercial and industrial properties or portions of these properties in the Vacant and Excess Land Property Tax Subclasses are taxed at a fixed percentage rate below the tax rate of the broader class. These properties are discounted at 30 per cent of the full Commercial rate and 35 per cent of the full Industrial rate.

Find out more about the program.

Provincial government changes and vacancy tax rebates

The Province has also been reviewing approaches related to the education property tax portion of the vacancy rebate and reduction programs. An excerpt from 2018 Ontario Budget (e-p. 321) states:

“In the 2016 Budget, the Province introduced a legislative framework to give municipalities broad flexibility to refine their vacancy rebate and reduction programs. This greater flexibility enables municipalities to tailor these programs to best reflect local circumstances, while considering the interests of local businesses. While municipalities that decided to modify their vacancy programs have implemented a variety of changes, 80 per cent of those municipalities will phase out the municipal component by 2020.

“With respect to education property taxes, the Province currently mirrors any municipal property tax decisions related to the vacancy programs. This has resulted in different treatments of education property taxes across the province, as each municipality modifies the programs to best suit its local needs. As a result, the Province announced in the 2017 Ontario Economic Outlook and Fiscal Review that it would review approaches related to the education property tax portion of the vacancy rebate and reduction programs in consultation with municipalities and the business community.

“As a result of the review, the government will align the education property tax portion of these programs with the changes made by municipalities, ensuring greater consistency across the province. This initiative would begin in 2019 to ensure that businesses have time to plan for any necessary program changes.”

Next Steps

Residents, businesses and property owners were invited to learn more about proposed changes by:

On June 13, 2019, City staff presented the Vacant Unit Rebate and Subclass Reduction Programs Report to the administrative policies committee.

The Administrative Policies Committee recommend as follows:

  • That Council approve the phase out of the current Vacant Unit Rebate program over a two year period such that for the 2018 taxation year (applications due by Feb. 28, 2019), the existing vacant unit rebate will continue to be available, for the 2019 taxation year (applications due by March 2, 2020) the rebate rate will be reduced to 15 per cent for commercial and 17.5 per cent for industrial vacant units, and for the 2020 taxation year (applications due by March 1, 2021) the rebate will be fully eliminated.
  • That Council endorse the continued review by staff of the subclass reductions for vacant and excess land property tax subclasses for possible changes to align with the changes being made at the provincial level for the education property tax portion of these programs.

This recommendation will be presented to council at the July 9 meeting.

Consultation has concluded