Although it’s only in its second year of effect, Toronto’s Vacant Home Tax has fully spiralled into chaos, and the City has had to back-track on over 100,000 charges that were mistakenly issued for the 2023 tax year. As such, it seems that a shake-up is very much on the table at this week’s City Council deliberations when it comes to how the tax will be rolled out in the years to come.
To recap: the City told STOREYS in a statement last week that approximately 150,000 homes were ‘declared or deemed’ vacant in 2023, leaving those homeowners strapped with the tax. At that time, the City said at least 61,000 of those decisions had been reversed because they were unduly issued.
But both of those figures have apparently only escalated in the time that has elapsed since. According to a file prepared by Toronto City Manager Paul Johnson that was sent to city staff on Monday, approximately 167,346 property owners were informed by the City that they were subject to the Vacant Home Tax for the 2023 taxation year. To date, Johnson said, some 108,000 of those charges have been reversed.
That essentially means that almost 65% of those supposedly ‘vacant’ homes were actually not so, although the City has opted not to reveal of break-down of how many cases chalked up to a lack of declaration verses the city’s own mistake when asked by STOREYS, only saying that they need to conduct “further investigation” and look into "details about specific situations” before providing an explanation.
Although the word around the web has been that many people simply didn’t submit their declarations (and some of those same people successfully declared last year, they just didn’t realize that they had to declare every year), Toronto’s Budget Chief Shelley Carroll has recently come out and said that “many residents have received a Vacant Home Tax bill despite having filed the declaration on time” and that “it seems this happened to people who filed the declaration on time but after property tax bills had been issued.”
The City neither confirmed nor denied Carroll's statement by the time of publishing.
In any case, Toronto City Council will take a good hard took at how the tax is executed this week — as mentioned earlier — and more than one councillor is suggesting axing the tax completely.
Perhaps unsurprisingly, because they’re both frequent naysayers, it’s councillors Vincent Crisanti (Ward 1, Etobicoke North) and Stephen Holyday (Ward 2, Etobicoke Centre) who are most vehemently opposed to the Vacant Home Tax in general. In fact, they argue that, given this latest mishap, Toronto should ‘cancel’ the program entirely.
“It is clear the Vacant Home Tax is not only invasive to our taxpayers, but it is also disruptive and inconvenient beyond repair. Hundreds of Torontonians have communicated with my office, their local Councillor offices, and lined up at their local civic centres,” the motion from Crisanti reads.
“Some people claimed they never received a notice letter requesting their declaration, did not receive adequate communication from the City alerting them of the annual registration requirement and deadline, or knew the program existed at all. The process of rectifying the wrongful tax bill coupled with a late penalty fee has also been unnecessarily difficult. My motion is seeking an immediate cancellation of the Vacant Home Tax and requests that city staff report back on innovative ways in handling the housing affordability crisis to better address the housing stock.”
In addition, Councillor Crisanti says he wants the Vacant Home Tax to be made “more senior friendly through enhanced accessibility measures and determine if the late penalty fee can be waived for our seniors who have not declared due to various different reasons.”
Also, Councillor Paula Fletcher (Ward 14, Toronto-Danforth) has put in a motion that will be considered by Council this week to suspend the $21.24 late fee charge for the Vacant Home Tax for 2024, and is directing city staff to refund residents who have already paid.
There have been other challenges to the Vacant Home Tax to speak of as well, although they’re not quite as recent. In an email update sent out a few weeks ago, Councillor Jamaal Myers (Ward 23, Scarborough North) said that he believes the City can find a “more efficient way to identify homes that are unoccupied without the cumbersome process of homeowners completing annual declarations.” He added that the way things are being done now may also be an unnecessary drain on city resources.
That was not the first time Myers questioned the effectiveness of the filing process. “Isn't there a way to collect the information by targeting homes that we suspect are vacant rather than asking everyone in the city to fill out these forms?” Myers asked at last month’s City Council meeting. “It seems terribly inefficient how we do this, asking people to declare their homes vacant when most people are just going to not do that, rather than just targeting the homes that we suspect are vacant.”
He later suggested scrapping the declaration process in favour of a more pointed system that relies on utility usage. “We're not really looking for declarations, we're looking for those homes that are actually vacant. That should be the focus rather than getting people who live in their homes to fill up this form,” he said. “There's water, there's electricity, there's regular usage, we can see if a home is being used or not.”
But bear in mind: there isn’t really a precedent for a more efficient and effective filing process. The City of Vancouver’s Empty Home Tax — it’s been in effect for about seven years — is executed the same way, with homeowners required to declare the status of their properties on a yearly basis.
Other Councillors have argued that the City just needs to be better when it comes to communication. Councillor Alejandra Bravo (Ward 9, Davenport) said in a community update a few weeks ago that it was “not well-communicated and made clear” to homeowners that they would have declare the occupancy status of their properties more than once.
Around the same time, Ward 24 Councillor Paul Ainslie pointed to the fact “there was no communication to everyone in easily understandable language” in a letter to Scarborough-Guildwood residents. Ainslie also said, like Crisanti, that not enough consideration was given to seniors and those who don’t have access to a computer.
