Market Insight for January 19

Have you done your declaration for your home occupancy status for 2023? The City of Toronto is reminding all residential property owners to declare their property’s occupancy status for the 2023 taxation year by February 29, 2024. As part of the Vacant Home Tax program, a declaration must be made each year, even if the owner resides at the property.

A property is subject to the Vacant Home Tax if it is a residential property that is not the principal residence of the owner or permitted residents, is unoccupied for more than six months and does not qualify for an exemption or is a property where no declaration is submitted.

While all owners of properties classified within the residential property tax class must submit a
declaration of occupancy status, the following are not subject to the Vacant Home Tax:

• properties that are the principal residence of the owner
• properties that are the principal residence of a permitted occupant or occupied by a tenant
(including business tenants)
• properties that qualify for an exemption

There are exemptions to the tax, including if the homeowner is in long-term care, if the property is undergoing repairs or renovations or if vacancy has been caused by the death of the owner. Property owners or their authorized representative (for example, a relative or friend) can declare the occupancy status of a property through the secure online portal available on the City’s Vacant Home Tax webpage. Alternatively, owners or their representative can submit a paper declaration form available at Property Tax and Utility customer service counters at Toronto City Hall and all Civic Centres, or by contacting 311.

For the 2022 and 2023 taxation years, a Vacant Home Tax of one per cent of the Current Value Assessment (CVA) will be levied on all Toronto residences that are declared, deemed or determined to be vacant for more than six months during the previous year.

In October, Toronto City Council approved an increase in the tax rate for vacant properties from one per cent to three per cent for the 2024 taxation year, which will become payable in 2025.

To make a declaration of occupancy status, homeowners will need their property assessment roll number and customer number, both of which can be found on their property tax bill. City staff say that revenues from the first full year of the tax were $54 million and with the new increase of three percent it is estimated to bring in roughly $105 million in 2025, nearly double the 2022 revenue at one per cent.

For 2022, there were 2,336 property owners who declared their residential units vacant, while 44,902 other properties were deemed vacant by the city because no declaration was made. Late declarations received through a complaints process by August reduced the number of homes deemed vacant to 17,437.

The goal of the Vacant Home Tax is to increase the supply of housing by discouraging owners from leaving their residential properties unoccupied, and instead making them available for rent or for sale.

If you choose to keep your property vacant, you will be subject to this tax. Investors with units sitting empty will likely be among those paying the tax.

Revenue from the Vacant Home Tax goes towards affordable housing initiatives. Failure to declare or making a false declaration may result in a fine of $250 to $10,000.