Toronto City Council voted to increase the Vacant Home Tax from 1% to 3% on Wednesday — a move that City staff says will bump revenues from the tax up to $105M in 2025. Revenues have been around half of that with the tax at 1%.
“We now know that 50% of Torontonians rent, and the rent is so high that every day there’s anxiety, wondering if this is the day where they get evicted, where they get a notice slipped in under the door, where their rent is going to go up 10%, 20%, 30%,” Mayor Chow said to Council on Wednesday.
“At the same time, we're seeing speculators sitting on much-needed housing, strangling the market, driving the price of rental housing higher and making it even less affordable for people.”
Chow noted that revenues collected will allow the city to bring more units to market while expanding its stock of affordable and supportive housing. Still, council has affirmed that the ultimate goal of the Vacant Home Tax is to discourage speculators and “collect zero dollars.”
“No one should be keeping a home empty during this housing crisis,” Chow also said.
The increase to the tax rate — it will go into effect for the 2024 tax year — was just one of a number of recommended changes to the tax adopted by the Executive Committee earlier this month.
Council voted almost unanimously on Wednesday to direct additional revenues from the 2023 Vacant Home Tax to the Multi-Unit Residential Acquisition program, through which not-for-profit housing providers can access funding to preserve existing affordable rental housing stock across the city. Only Councillor Stephen Holyday was in opposition of the changes.
A number of other motions were also carried, including one from Councillor Paula Fletcher that will require short-term rental units occupied for 28 consecutive days or longer without a lease in place to be subject to the Vacant Home Tax, a two-year exemption from the tax in cases where a property owner has passed away in the reference taxation year, and a three-year exemption from the tax following the death of the property owner in a taxation year.
According to a report from the Interim Chief Financial Officer and Treasurer, 2,161 properties have been declared vacant in Toronto as of August 1, 2023, while 17,437 have been deemed vacant.
That latter figure is down compared to February 2022, notes the report, as more declarations were received through the Notice of Complaint process, and is on track to decrease further as more declarations come in.
Although actual revenues generated by the tax “will not be finalized until all Notice of Complaints and audits for the taxation year is complete,” the report reveals that the City has already collected $54M in Vacant Home Tax revenue to date, “which is consistent with the estimated and budgeted revenues for 2023.”
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