City councillors want tax rules changed for vacant property

Generous provincial tax rebates encourage landlords to leave commercial real estate vacant, rather than find tenants, say Ottawa councillors.

Councillors on the City of Ottawa's finance committee want an end to a practice they say encourages landlords to keep commercial property vacant.

Under provincial tax rules, commercial property owners get a 30 per cent tax rebate for vacant buildings and industrial property owners receive a 35 per cent rebate.      

But some neighbourhood groups say that's encouraging neglect, and creating eyesores all over the city.

Before fire gutted it, a brown brick building in Old Ottawa South was home to a video store and spa. Now plywood covers the windows and a padlock hangs on the door of the two-storey structure.

People who live and work in this neighbourhood, like Brian Doubleday, are growing weary of seeing it sit empty in an otherwise vibrant stretch of Bank Street.

"It's been way too long, it's not good for the neighbourhood, it's an eyesore and something needs to be done," said Doubleday.

While the owner of this property is losing out on revenue for lack of tenants, the vacancy makes the owner eligible for an annual tax rebate from the city. Each year, the city gets hundreds of rebate applications valued at between $5.5 million and $7 million.

Kevin O'Donnell is a downtown resident who is also tired of seeing vacant buildings. O’Donnell addressed the city's finance committee Monday morning about his concerns.

"If a property owner cannot afford to pay their property taxes because their building is vacant, they should cut their losses and sell it to someone who can put it to use," he said.

Ottawa city councillor Peter Clark said the province should revisit a policy Clark says amounts to a "permanent subsidy" for negligent landlords.

"We have to start trying to get people who have derelict properties to do something about it," said Clark.

In the interim, the city intends to lobby the province to limit such rebate periods to three years.