Attention all Toronto homeowners. If you own residential real estate in Toronto, you must declare the occupancy status of your property by February 29, 2024. This declaration must completed yearly. As a Toronto real estate agent, it is one of our goals to keep our clients educated and informed. This blog on the Toronto Vacant Home Tax is one that you don’t want to miss. Let’s get into it.
What is the Vacant Home Tax
As most of you know, housing supply in Toronto has been an issue over the past several years. The goal of the Vacant Home Tax is to help boost the housing supply in Toronto. The goal is to encourage owners to keep their homes habited and avoid properties being unoccupied. The Vacant Home Tax (VHT) will need to be paid by all Toronto homeowners who keep their homes vacant for more than 6 months in a calendar year. The funds collected from the tax will be put towards developing more affordable housing opportunities.
How the Vacant Home Tax Works
All Toronto homeowners must declare the occupancy status, even if the owner resides there. The vacancy tax does not apply to the following:
- properties that serve as the primary residence of the owner(s)
- properties that serve as the primary residence of a tenant
- exempt properties
What is Considered Vacant?
- properties that do not serve as the primary residence of the owner(s) and are not occupied by renters for more than six months during that calendar year
- properties that are not eligible for the exemption
- properties that have been filed as vacant due to the owner failing to submit their declaration
NOTE: you do not need to declare your status if it falls into the following categories:
- properties that have not yet been assessed
- properties that are deemed as vacant land, condo locker or parking space
- properties that are deemed multi-residential, industrial or commercial
Vacant Home Tax Calculation
Toronto homeowners who will pay the vacant tax will be given a Vacant Home Tax Notice towards the end of March. Payments will need to be made in three instalments from May to July. The Vacant Home Tax in 2023 will be 1% of your residential property’s Current Value Assessment. If your current value is $1,000,000, you will owe $10,000.
Next year, the Vacant Home Tax will be increased to 3% of your Current Value Assessment. For example, if your home is valued at $1,000,000, you will be taxed $30,000.
To clarify, the 2023 tax will be calculated using the 2023 value assessment but payment in May 2024.
How to Submit Your Declaration
The city has an easy-to-use online portal that allows you to declare your status online. To access the portal, click here. If you prefer to manually complete and submit the form, click here to download the pdf. Before you get started, please note that you will need your customer number from your property tax bill.
Definitions of Occupancy Status
Note that Co-ops and multi-unit residential dwellings that have one customer/roll number only need one declaration for the whole building. If any one of the units has been occupied for six-plus months then the property is considered occupied.
Vacant Home Tax Exemptions
A property can remain unoccupied and qualify for exemption from the Vacant Home Tax if it meets any of the following conditions:
For more information about the VHT, visit the City of Toronto Vacant Home Tax page.
