Toronto's Home Vacancy Tax: What You Need to Know
The City of Toronto’s Vacant Home Tax was first introduced to increase housing supply in Toronto by discouraging homeowners from leaving residential properties unoccupied. Each year owners must self-report their home’s occupancy status to the city – even if they live there. Otherwise, the home will be automatically declared vacant and a bill that’s three per cent of the home’s assessed value will be sent to the owner.
How Does it Work?
Every year, homeowners in Toronto must complete an online form, which declares the occupancy status of their property for the previous year. The form asks homeowners to confirm whether their property has been vacant for more than six months in the past year, and if it has, to provide details about why the property remained unoccupied.
If homeowners fail to submit the form on time, or submit incorrect information, they may face penalties. These can include the immediate application of the 3% tax on the property’s current value assessment.
Challenges in Understanding the Tax
One of the biggest challenges I’ve seen with the home vacancy tax, is that many homeowners don’t fully understand what’s required of them. The form can be a bit confusing, especially for seniors or those who aren’t used to admin tasks like this.
To help my clients, with completing the form, I print it out for them, and even follow up to ensure that it’s submitted correctly. I also send out email reminders to ensure my clients are aware of the deadline and their obligations.
Declaring is mandatory
You have to declare if your property is occupied or vacant, it is mandatory if you own a home. I recently had a client who ran into some difficulties because she didn’t submit her declaration on time. She didn’t realize it was mandatory and didn’t meet the deadline. Because she pays her property taxes through her mortgage lender, the City began applying penalties directly to her account without her knowledge. This meant that a portion of her mortgage payments was redirected to cover the penalty.
To help her, I completed the online revision form and then brought her to City Hall, where we spoke with the clerk and the issue was resolved.
Remember, completing the declaration on time can save you time, money, and a lot of headaches. So, take a moment to review your property status and make sure the form is submitted promptly – your future self will thank you!
January 6, 2025
