A tax on vacant or underutilized properties


The "new taxing power" - to use the words of the Minister of Municipal Affairs - that the provincial government intends to grant to municipalities against owners of vacant, underutilized housing or vacant lots as part of Bill 39 has attracted media attention and reaction from CORPIQ.

A tax on vacant or underutilized properties

By Corinne Laberge


The feature article in La Presse entitled "Une nouvelle taxe et des "superpouvoirs ? aux villes" (A new tax and "superpowers ? for cities) sets out the ins and outs of the subject. The "What you need to know" insert immediately summarizes the main points: "The government has tabled a bill on municipal taxation. Cities will be able to impose a new tax on vacant or underutilized dwellings and vacant lots. Quebec is giving them new powers to accelerate housing construction."

"The new tax would apply to any dwelling unoccupied for at least 180 days a year and would amount to a maximum of 1% of the value of the dwelling," it says. "The owner of a $400,000 building that is unoccupied or underutilized would thus have to pay $4,000 to the municipality that decided to avail itself of this new taxing power, according to the example provided by the bill's sponsor, Minister of Municipal Affairs Andrée Laforest."

Cottages are not affected. However, a building owner who dedicates one or more units to short-term rentals such as Airbnb will have to pay the tax. In a time of crisis, there are "too many units that are currently being kept for subletting or rental purposes"(...) We need to make them available to people looking for a roof over their heads, Andrée Laforest pleaded at a press conference," reports the text.

The bill stipulates that "a dwelling is not vacant or underutilized if it is occupied for a minimum of 180 days per year by its owner, by a person with whom the owner has, or has had, a relationship of kinship or marriage, including through a common-law spouse, or a relationship of close assistance, or by another occupant by virtue, in the latter case, of a lease lasting at least 180 days, including a sublease". Minister Laforest goes on to explain that the 180-day limit was determined with a view  "respecting people who travel outside the city for six months of the year".

Cities will also have the option of "increasing the maximum rate that can be set for the serviced vacant lot category and dividing their territory into sectors for the purposes of imposing general property tax". In order to "give a tax vacation or have a different category for social housing or affordable housing", changes to the property tax system could be made by a municipality. As for "superpowers", France-Élaine Duranceau, Minister responsible for Housing, hopes to give cities permission "to quickly authorize housing construction projects even if they do not comply with urban planning bylaws" (...) "through amendments to her housing bill".

In addition, the provincial government will give the green light to the construction of secondary suites throughout the territory. "This will allow citizens to add a floor to their house to create a dwelling, or to transform a garage adjacent to the house into a dwelling, for example," we learn.

Commenting on the new tax on vacant or under-utilized dwellings, the Journal de Québec reports this statement by Andrée Laforest: "A municipality, in a housing crisis situation, cannot accept that a dwelling be vacant (or, for example) that it be rented for just three months a year". It is pointed out that "Minister Laforest's piece of legislation would enshrine in law a measure introduced by the agreement reached in 2019 between the government and the cities, namely the annual payment to municipalities of revenues derived from the growth of one point of QST". Ms. Laforest states that, according to estimates, this will bring a billion dollars into city coffers by 2030.

Global News points out that the bill's proposed taxation "is dividing owners and housing advocates". The Chairman of our Board of Directors, Éric Sansoucy, is quoted. "Couldn't we use our municipal resources better? Public organizations that own social housing are among those with the most empty units because they are under-maintained", he observes.

Rather than moving forward with punitive sanctions, the government should focus on creating incentives for landlords. "It is difficult to renovate, it is expensive, it is difficult to attract renovators, we're lacking labour", said Sansoucy, who also cites mortgage hikes as an additional issue owners are facing", relates the article.


Good news for secondary suites. A punitive approach to vacant units.

At CORPIQ, we welcome the secondary suites initiative, but we deplore the punitive approach to unoccupied units. In the first instance, we believe that the secondary unit measure will enable the rapid creation of housing units, by appealing to many single-family home and plex owners across Quebec. The idea is to get this large community involved by adding a rental unit to their property, for example, by converting a basement unit or garage, or by adding a floor.

However, we are opposed to the measure that would allow municipalities to overtax an owner holding a unit unoccupied for more than 6 months. Especially in a context where renovation costs are skyrocketing, with current interest rates, when units sometimes find themselves uninhabited for several months due to major work. The reality of the rental sector should definitely not be confused with that of other types of property, including condos. We therefore invite the Minister to amend her bill by excluding the rental sector from this legislation, which would be most counterproductive for the renovation of the aging existing stock. To find out more about CORPIQ's views on this tax on vacant or unused dwellings, consult our press release.

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