Toronto’s Vacant Home Tax is in effect for its second year, and the deadline for homeowners to declare their property’s occupancy status is fast approaching. Homes that are unoccupied for more than six months out of the calendar year are considered vacant and will be subject to the tax, which has been upped from 1% for 2022 to 3% for 2023.

Per the City of Toronto’s parameters, homeowners have until Thursday, February 29, to declare the 2023 occupancy status of their residential property, and are encouraged to submit their declaration through the City’s online portal.

The goal of the Vacant Home Tax is to free up housing supply in the city by de-incentivizing homeowners from leaving residences unoccupied. All proceeds collected from the tax will go towards affordable housing initiatives.

Declaring Occupancy Status:

Residential property owners in Toronto are now required to declare occupancy status every year, and the declaration must be made by either the property owner or someone acting on behalf of the property owner. The fastest way to submit the declaration is via the City’s online declaration portal — as mentioned — however, this year, the City will be offering several drop-in sessions for property owners who would like help to submit their declarations. When and where those sessions will be held, can be found here.

All declarations require the property owner’s 21-digit assessment roll number and customer number from your tax bill or property tax account statement. For housing providers specifically, the declaration requires information about tenants and/or permitted occupants.

Homeowners should also note that any information submitted in the declaration could be subject to an audit on a random or specific criteria basis, at which time additional information may be required to substantiate an occupancy claim.

Late or False Declarations:

Effective January 1, 2024, a fee of $21.24 will be imposed on those who fail to submit a declaration of occupancy status by the deadline. Penalties can end up as high as $250 for missing declarations, and $10,000 for false declarations.

Meanwhile, if a declaration is not submitted by the deadline, the property will be deemed vacant and will be subject to the Vacant Home Tax. The tax is based on the property’s occupancy status for the previous year, so if the home is declared vacant in 2023, the tax will be payable in 2024 and will be added to the tax bill for the property.

Exemptions to the Vacant Home Tax:

There are a few exemptions to the Vacant Home Tax worth noting:

  • In the event of the death of the property’s principal owner;
  • If the property is undergoing repairs or renovations and occupation and normal use of the property is prevented, all necessary permits have been issued for the repairs and renovations, and the City’s Chief Building Official agrees that the repairs or renovations are being actively carried out without unnecessary delay;
  • If the principal owner of the property is in hospital or long-term or supportive care;
  • In the event of a legal ownership transfer, excluding name changes, the addition of a second owner, and the removal of a second owner;
  • If the property was vacant for employment purposes;
  • In the event of a court order that prohibits occupancy.

Those requesting an exemption must provide supporting documentation, which varies depending on the nature of the exemption.

Paying or Disputing the Vacant Home Tax:

Those with properties deemed subject to the Vacant Home Tax, including properties for which no declaration was filed, will be issued a Notice of Assessment by mail at the end of March. At that time, property owners have the option to file a Notice of Complaint to have the decision reviewed. The complaint can be submitted through the City’s online portal beginning in early April.

For those not appealing their Notice of Assessment, Vacant Home Tax payments are due in three equal installment amounts on May 15, June 17, and July 15, 2024. The fastest way to pay is online through MyToronto Pay or your financial institution’s online banking portal.

Overdue payments will be subject to interest charges at a rate of 1.25% on the first day of default and the first day of each month thereafter, for as long as taxes or charges remain unpaid.

More information on the Vacant Home Tax can be found on the City of Toronto’s website.