Some Ottawa renters to see an automatic rent reduction in 2027

Ottawa City Hall is seen in this undated file photo. (CTV News Ottawa)

Approximately 57,000 tenants living in older Ottawa apartment buildings should see a reduction in their rent in January, as the City of Ottawa continues to change the municipal tax rate for some properties.

Councillors on the finance and corporate services committee voted on Tuesday for the city to proceed with the second year of a four-year plan to reduce the multi-residential tax ratio for apartment buildings built before 2001.

A tenant living in an older building paying $2,000 a month for rent would see their rent lowered by $13.90 a month, saving approximately $166 a year. A tenant paying $1,500 a month in rent would save $126 in 2027 with the rent reduction, according to the city.

“One of the tools available to support housing affordability is adjusting tax ratios,” staff told councillors on Tuesday. “In Ottawa, multi-residential buildings constructed before 2001 pay a significantly higher tax rate than new purpose-built rental buildings.”

The city currently has two tax classes for multi-residential class properties in Ottawa. Multi-residential properties built before 2001 fall under the multi-residential tax class, which is subject to a tax ratio of 1.3, while properties constructed since 2001 are placed in the new multi-residential tax class with a tax radio of 1.0, aligned with the residential tax ratio.

In 2024, council approved a four-year plan to gradually reduce the multi-residential tax ratio from 1.4 to 1.0. In 2026, the tax ratio was reduced to 1.3 per cent, resulting in a monthly rent reduction of 0.9 per cent.

Under the plan, the multi-residential tax ratio would be reduced to 1.2 on Dec. 31, equalling a 3.49 per cent property tax reduction for each residential property.

Staff say rent reductions would be provided to roughly 57,000 tenants across the city, resulting in a 3.49 per cent tax reduction for properties, and a 0.7 per cent reduction in rent a month.

The report says the property tax reduction would trigger a provincially mandated automatic rent reduction for tenants under the Residential Tenancies Act. Landlords would be required to notify tenants between Oct. 1 and Dec. 15.

All rent reductions would take effect on Dec. 31.

The automatic rent reductions from the City of Ottawa would not apply to commercial, industrial, recreational or certain residential properties, such as public housing and non-profit housing, according to the city.

Landlords can file applications to challenge the rent reduction at the Ontario Landlord and Tenant Board. The city says if a landlord does not apply a reduction, tenants have the right to file a Form T3-Tenant Application with the Landlord and Tenant Board to formally request it.

$18 hike in residential property taxes

Staff say the reduction in the multi-residential tax ratio would result in a slight increase in property taxes for residential properties to offset the loss in revenue from residential properties.

“Reducing the ratio to 1.2 will permanently decrease municipal taxes paid by the Multi‑Residential class by an estimated $8.4 million, representing a 3.49 per cent reduction for each property, offset by a 0.34 per cent increase for all other classes,” the report said.

“The average residential property assessed at $415,000 would see an annual increase of approximately $18.”

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