Toronto Vacant Home Tax – First Annual Deadline to Declare is February 2, 2023

The City of Toronto has implemented an annual tax on vacant Toronto residences in hopes to offer some relief to the current housing shortage, effective for the 2022 calendar year and payable beginning in 2023. The Toronto Vacant Home Tax (VHT) requires all Toronto residential property owners to submit a declaration of occupancy. Homeowners who choose to keep their properties vacant will be subject to this tax.

VHT does not apply to the following types of properties:

• properties that are the principal residence of the owner
• properties that are the principal residence of a permitted occupant or tenant
• properties that qualify for an exemption

This new tax should not be confused with the federal Underused Housing Tax or any future provincial tax on vacant homes, which could apply in addition to this new Toronto Vacant Home Tax.

For the 2022 occupancy year, the deadline to submit a status is February 2, 2023. Click here for the online portal and submit your declaration.

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Mandatory Declaration of Occupancy Status

A declaration of status must be made by all residential property owners, or someone acting on behalf on the owner, even if they lived in the home.

Properties of owners who fail to make the annual declaration by the deadline and/or provide supporting documentation may be deemed vacant. A fine of $250 to $10,000 may also be imposed on those who fail to declare or make a false declaration.

The VHT will be calculated once the declaration is submitted. Principal residences which were unoccupied for a total of six months or less throughout the taxation year is exempt from the tax.

What are the exemptions?

A property may be left vacant and is exempt from the tax if one of the following apply:

1. The property was vacant for six months or more due to the death of an owner in the current or previous tax year.
2. The property is undergoing repairs or renovations, and
   1. normal occupation is prevented for at least six months of the year by the repairs and renovations,
   2. all requisite permits have been issued, and
   3. the chief building official is of the opinion that the work is being carried out without unnecessary delay
3. The principal resident is residing in hospital, care home, etc. for at least six months of the year (capped at two consecutive years).
4. The property was purchased in the previous year and the sale involved a 100% transfer of an interest in the property to an unrelated individual or corporation.
5. The property is required for occupation for employment purposes by its owner for at least six months, if the owner has a principal residence outside of the Greater Toronto Area.
6. There is a court order in force which prohibits occupancy of the property for at least six months of the taxation year.

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Vacant Home Tax Calculation

The Vacant Home Tax is calculated to be 1% of the Current Value Assessment (CVA) on all Toronto residences that are declared, deemed, or determined vacant for more than six months during the previous year. The tax is based on the home’s occupancy status for the previous year, i.e., if the home is vacant in 2022, the tax becomes payable in 2023.

Example: If the CVA of the property is $1,000,000, the VHT would be $10,000 (1% x $1,000,000)

How to Declare

To make a declaration, the property’s 21-digit assessment roll number and customer number will be needed. These can be found on the tax bill or property tax account statement.

Declarations can be done through the City’s secure online declaration portal. If required, homeowners can complete a paper declaration form. This paper form must be received by the City of Toronto before the deadline.

A VHT Notice will be issued to property owners who are subject to the tax in March/April 2023. The payment will be due on May 1, 2023.

To correct an error on the declaration:

• Prior to February 2nd deadline – simply submit a new declaration
• If the deadline has passed - File a Notice of Complaint with the City

For more detailed information about the Vacant Home Tax, please visit the City of Toronto website:
https://www.toronto.ca/services-payments/property-taxes-utilities/vacant-home-tax/

Similar Tax in Other Municipalities

It is expected that a tax similar to the VHT will be applied in most of the main population centers in Ontario. Homeowners are encouraged to check their municipality’s websites for more current updates.

• City of Ottawa
  • A similar program referred to as Vacant Unit Tax has already been imposed. All residential property owners must submit an occupancy declaration for the 2022 taxation year. The deadline to declare is March 16, 2023.
  • Click here for the online portal and submit your declaration.
• City of Hamilton
  • Planned to be imposed in 2023, with tax due in 2024.
• Peel, York, Halton and Durham Regions
  • Currently in discussion phase.