Market Update for January 13

All Toronto residential property owners must submit a declaration of their property’s 2022 occupancy status by February 2, 2023.

 A property is considered vacant if it was not used as the principal residence by the owner(s) or any permitted occupant(s) or was unoccupied for a total of six months or more during the previous calendar year. Properties may also be deemed (or considered to be) vacant if an owner fails to make a declaration of occupancy status as outlined in the bylaw.

The goal of the City of Toronto Vacant Home Tax is to increase the supply of housing by discouraging owners from leaving their residential properties unoccupied. Homeowners who choose to keep their properties vacant will be subject to this tax.

An annual tax will be levied on vacant Toronto residences, payable beginning in 2023. Revenues collected from the Vacant Home Tax will be allocated toward affordable housing initiatives.

All residential property owner(s) in Toronto will be required to declare the occupancy status of their property(s) annually, even if they live there. Declarations must be made by the homeowner or someone acting on behalf of the owner. The declaration will determine whether the Vacant Home Tax applies and is payable.

A Vacant Home Tax of one percent of the Current Value Assessment (CVA) will be imposed on all Toronto residences that are declared, deemed, or determined vacant for more than six months during the previous year. For example, if the CVA of your property is $1,000,000, the tax amount would be $10,000 (1% x $1,000,000).

The tax is based on the property’s occupancy status for the previous year. For example, if the home is vacant in 2022, the tax will become payable in 2023.

Owners of properties subject to the tax will be issued a Vacant Home Tax Notice in March/April, and payment will be due on May 1st.

Residential properties will be deemed vacant if the owner fails to make the annual declaration by the deadline of February 2nd and/or provide supporting documentation.

If there is an error in the declaration you submitted, you can:

• Submit a new declaration prior to the February 2 declaration deadline
• File a Notice of complaint if it is after the declaration deadline

Failure to declare or making a false declaration may result in a fine of $250 to $10,000.

There are some exemptions where no tax is payable if the property is vacant:

• The Owner has died in the Taxation Year or in the previous Taxation Year

• The Vacant Unit is undergoing repairs or renovations, and the following
conditions have been met:

(a) Occupation and normal use of the Vacant Unit is prevented by the repairs or renovations for at least six months of the Taxation Year

(b) All requisite permits have been issued for the repairs or renovations

(c) The City’s Chief Building Official is of the opinion that the repairs or
renovations are being actively carried out without unnecessary delay.

• The Principal Resident of the Vacant Unit is residing in a hospital, long-term or supportive care facility for a period of at least six months during the Taxation Year

• Legal ownership of the Vacant Unit has been transferred to an arm’s length transferee in the Taxation year

• The Vacant Unit is required for occupation for employment purposes for an aggregate of at least six months in the Taxation Year, by its Owner who has a Principal Residence outside of the Greater Toronto Area

• A court order is in force which prohibits occupancy of the Vacant Unit for at least six months of the Taxation Year