A new report from city staff details that the City of Hamilton is projected to collect $11.27 million from the first year of the Vacant Unit tax, which is $6.95 million more than expected, driven largely by those whose properties were deemed vacant due to non-response.
The $11.27 million also includes $10.18 million generated from those who failed to fill out the city’s declaration, meaning that those properties could be inadvertently subject to the tax even if they are occupied.
Multiple councillors have expressed concerns that those who did not respond but are now subject to the tax could potentially be elderly, those who do not speak English fluently, or those who simply do not check their mail regularly.
The first year that Hamilton residents had to submit Vacant Unit Tax declarations was 2025, with occupancy status based on whether or not a person’s residential property was unoccupied for more than 183 days in 2024.
The staff report says that they received a response for 175,035 properties.
The city’s data as of June 9, 2025, indicated that 372 properties were declared vacant and 6,409 were deemed vacant due to non-response.
Since then, the city says that 3,651 property owners of the 6,409 deemed vacant have filed a Notice of Complaint, appeal, or late appeal to dispute their charge.
The report says that the appeals process remains open until Dec. 31, 2026.
As of May 22, 2026, after accounting for successful disputes, year one of the Vacant Unit Tax saw 379 properties declared vacant, 158 determined vacant by the city, and 2,751 deemed vacant due to non-response.
That means that a total of 3,288 properties were subjected to the tax in its first year.
The city says that revenues are $1.09 million from properties that were declared vacant, and $10.18 million is projected from properties that were deemed vacant due to non-response.
Total revenues for the first year of the tax are currently calculated at $11.27 million – $6.95 million more than originally expected.
Staff previously forecasted that there would only be 1,135 vacant properties across the city and that $4.32 million in revenue would be generated.
The staff report also details that capital implementation costs associated with the program were 65 per cent below forecast.
Capital costs were originally estimated at $2.6 million but came in at only $900,000 due to the use of an existing third-party vendor for the online declaration portal and the fact that the program launch was deferred one year, so several costs were paid from the operating budget instead of the capital project.
Costs to administer the program, pay 16 full-time staff, and pay for billing, printing, postage, communications, audits, and dispute resolution were originally estimated at $2.25 million but came in at $2.02 million.
Therefore, costs for the first year of the program were $2.92 million rather than $4.85 million.
Subtracting the $2.92 million in costs from the $11.27 million in revenue means that the city’s net revenue from the first year of the tax is $8.35 million, which will be transferred to the Affordable Housing Funding Program Reserve.
The staff report also says that preliminary second-year results, in comparison to first-year results, show that 288 units of those previously declared vacant have returned to occupancy; however, the city is unable to tell if that is a result of the tax or simply natural rental turnover.
Nevertheless, city staff say that because of those 288 units, the Vacant Unit Tax “may be contributing as intended by promoting turnover in underused properties and reducing prolonged vacancies.”
At the same time, the city says that 1,937 units have remained vacant for a second consecutive year, either as units declared vacant or those deemed vacant.
The report concludes, “This remaining group suggests that the current one per cent tax rate may not be sufficient to drive change in all cases.”
“In the future, Council may wish to consider whether additional policy tools, such as an escalating tax rate for repeat vacancies, similar to other municipalities, could further strengthen the program’s effectiveness.”
Council will vote on whether or not to continue collecting the Vacant Unit Tax for a third year in July.
The Hamilton Independent’s most recent previous coverage of the Vacant Unit Tax, including Council voting records, can be read here.
Based in Hamilton, he reaches hundreds of thousands of people monthly on Facebook, Instagram, TikTok, and Twitter. He has been published in The Hamilton Spectator, Stoney Creek News, and Bay Observer. He has also been a segment host with Cable 14 Hamilton. In 2017, he received the Chancellor Full Tuition Scholarship from the University of Ottawa (BA, 2022). He has also received the Governor General’s Academic Medal. He formerly worked in a non-partisan role on Parliament Hill in Ottawa.
