Imagine a law meant to tackle vacant homes, but instead, it’s actually encouraging homeowners to let their properties fall into disrepair. That’s exactly what’s happening in Sault Ste. Marie, where a well-intentioned vacant home tax (VHT) bylaw has inadvertently created a loophole that’s being exploited. But here’s where it gets controversial: the city’s legal department is now pushing to remove a key exemption that’s been labeled as vague and subjective—the term 'uninhabitable.'
Here’s the backstory: In January 2023, Sault Ste. Marie introduced a four percent tax on vacant homes, aiming to incentivize property owners to keep their homes occupied. However, the bylaw included an exemption for homeowners who claimed their properties were 'uninhabitable for reasons beyond the owner’s control.' Sounds fair, right? Wrong. Jenna Ricard, from the city’s legal department, argues that this exemption is too broad and has become a loophole, allowing homeowners to neglect their properties while avoiding the tax.
And this is the part most people miss: the term 'uninhabitable' is incredibly subjective. What does it really mean? Is a home without a working furnace uninhabitable? What about one with a leaky roof? Without clear criteria, the exemption becomes a free pass for neglect. Ricard’s report to Mayor Matthew Shoemaker and ward councillors highlights that this loophole undermines the very purpose of the VHT—to encourage property maintenance and occupancy.
A working group, comprising representatives from the city’s tax, legal, building, and planning departments, reviewed the bylaw and found that enforcing the 'uninhabitable' exemption is both difficult and costly. It requires inspections by the city’s building division staff and approval by the chief building official, adding unnecessary administrative burden. Interestingly, while the province recommended this exemption, it’s not mandatory. In fact, no other Ontario municipality with a VHT bylaw includes an 'uninhabitable' exemption. Cities like Ottawa and Hamilton, however, have a more restrictive 'hazardous property' exemption, which applies only when a property is uninhabitable due to hazardous conditions or substantial disaster damage—a much clearer and harder-to-abuse criterion.
So, what’s the proposed fix? Ricard will ask city council on Monday to remove the 'uninhabitable' exemption entirely and replace it with more precise language. Here’s what’s on the table:
- Major repairs or renovations are defined as work requiring city-issued building permits that render a property unoccupiable for at least 183 days of the taxation year. This includes issues like lacking essential facilities (e.g., sanitary systems, kitchens) or structural problems.
- Routine maintenance, cosmetic improvements, or work that can be done while the home is occupied won’t qualify as major repairs.
- The exemption for major repairs can only be claimed for one taxation year within every five consecutive years.
- Property owners will need to provide supporting documentation, such as permits, inspection reports, and contractor receipts, to prove the work is actively and diligently being carried out.
- These changes will apply to future VHT declarations, starting with the 2025 taxation year.
But here’s the controversial question: Is removing the 'uninhabitable' exemption fair to homeowners facing genuine, uncontrollable issues? Or does the benefit of closing this loophole outweigh the potential hardship for a few? The city council’s decision on Monday could set a precedent for how municipalities balance property rights with community needs. Tune in to the livestream on SooToday at 5 p.m. to watch the debate unfold—and let us know in the comments: Do you think this change is a step in the right direction, or does it go too far?
