On January 25, 2023, Hamilton Councilors passed a by-law in hopes it would free up the Hamilton housing supply for longer-term rentals. The by-law will also ban commercial operators with multiple properties listed on rental sites like Airbnb.
Under the new by-law, no person shall operate a short-term rental unless it is that person’s principle residence, or the short-term rental is on the same property as the person’s principle residence. In addition, anyone who is able to operate a short-term rental under this new by-law must obtain a licence to do so from the City of Hamilton and have the proper insurances.
According to by-law no. 23-005, a short-term rental is considered to be all or part of a dwelling unit used to provide sleeping accommodations to the travelling public for any rental period that is less than 28 consecutive days in exchange for payment or other remuneration.
The City of Hamilton hopes this new rule will stop people from buying investment properties for short-term rentals, and affordable housing within the city will increase.
In addition to the new by-law, the City of Hamilton also introduced a Vacant Unit Tax (VUT).
This tax is an annual tax payable by the owner of an eligible residential property that has been vacant for more than 183 days in the previous calendar year.
A residential unit will be considered vacant and subject to the tax if the owner:
· Fails to make a mandatory occupancy declaration by the deadline;
· Makes a false mandatory occupancy declaration;
· Does not provide information or submit any evidence required by the City;
· Provides false information or submits false evidence to the City or;
· If at least one unit within the eligible property is unoccupied.
Beginning January 2024, and every year after, all residential property owners in Hamilton are required to declare the occupancy of their properties by submitting a mandatory occupancy declaration. If an occupancy declaration is not submitted, the property will be considered vacant and the VUT will be charged.
A principle residence will not be subject to the VUT, but is still required to submit an occupancy declaration.
The Vacant Unit Tax is designed to encourage homeowners to rent out empty properties to help with Hamilton’s affordable housing supply.