Understanding Toronto Vacant Home Tax

City of Toronto has just enacted the vacant home tax.  Here are some highlights that you should know if you own any properties in the City of Toronto:

Everyone Has To Complete Toronto Vacate Home Tax Declaration

You must complete a declaration about the occupancy status annually.  To submit a declaration, you can visit City of Toronto Vacant Home Tax website to submit one. 

You need to submit the declaration regardless if your house is vacant or occupied, principal residence or rental.  Everyone has to submit it.  If you fail to submit, your property might be deemed vacant and subject to the tax.  You can always submit a late declaration with a fine of $250 to $10,000. 

How much is the Toronto Vacant Home Tax

The vacant home tax is calculated as 1% of your Current Value Assessment which is the assessment on your property tax bill.  If your house is valued at $3M, then your vacant home tax will be $30K on top of the normal property tax that you still have to pay. 

When is the Toronto Vacant Home Tax Not Applicable?

There are some scenarios that the tax doesn’t applied.  Though all homeowners are required to submit a declaration of occupancy status, the tax does not apply to:

• 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

You don’t have to pay vacant tax if it’s the following

• Occupied as principal residence of homeowner for at least 6 months
• Occupied as principal residence of a permitted occupant
• Occupied by a tenant
• Vacant with an eligible exemption

Examples that Toronto Vacant Home Tax is Applicable

The following will be examples that the vacant home tax applied:

• You are a snowbird who only lives in the principal residence one month per year
• You have a downtown condo left vacant

Eligible Exemptions

The eligible exemptions are 

• Death of a registered owner
• Repairs or renovations
• Principal resident is in care
• Transfer of legal ownership
• Occupancy for full-time employment
• Court order

The deadline to submit the occupancy status for your Toronto homes is Feb 2, 2023.  For more information, please visit the  City of Toronto Vacant Home Tax website.