Toronto residential property owners, including corporations, partnerships and trusts, must submit a declaration of their property’s occupancy status for 2022 and pay any tax assessed on the property in 2023.
What is it?
The City of Toronto has implemented a Vacant Home Tax on all vacant residential properties for the 2022 taxation year. The goal of this tax is to increase the supply of housing by discouraging owners from leaving their residential properties unoccupied. All residential property owners in the City of Toronto must declare the occupancy status of their residential property(s) annually. For 2022, this declaration must be submitted by February 2, 2023. If the declaration is not submitted, the property will be deemed to be vacant, and the tax will be applicable.
What is considered a vacant property?
In Toronto, a property is vacant if it has been unoccupied for more than six months in the previous calendar year, unless the residential property is the principal residence of an occupant. If the property is a residential rental property, it will not be considered as vacant if the property is rented for a minimum of 30 consecutive days and is occupied by one or more tenants for six months or more throughout the year. Short-term rental arrangements, such as through AirBnB, will likely result in the property being considered as a vacant property.
What vacant property exemptions are available?
The following exemptions are available to avoid the assessment of the tax:
- Death of a registered owner, applicable to the year of death and one subsequent year
- Property is undergoing repairs or renovations that prevent normal occupation for at least six months of the year, all necessary permits have been issued and the City’s Chief Building Official believes the work is being carried out without unnecessary delay
- Principal resident is residing in a hospital, care home or care facility for at least six months of the year. This exemption is allowable for up to two consecutive years
- Legal ownership has been transferred to an unrelated individual or corporation in the year
- Property is required for occupation for at least six months of the year for employment purposes by an owner who has a principal residence outside of the Greater Toronto Area
- A court order prohibits occupancy for at least six months of the year
How is the tax calculated?
Residential properties subject to this tax, including where a property owner fails to make a declaration by the required due date, are subject to pay 1% of the property’s 2022 Current Value Assessment. Late declarations may be subject to a fine of $250. Failure to declare or making a false declaration may result in a fine of $250 to $10,000.
How to make your property status declaration
Toronto residential owners may have received their Notice already to make this declaration with the information that is required to enter when making a declaration. In absence of this notice, to make a declaration, property owners can obtain their 21-digit assessment roll number and customer number from their tax bill or property account statement. The City has created an online declaration portal that can be accessed at toronto.ca/VacantHomeTax. Alternatively, homeowners can submit a paper declaration form that can be obtained online but this must be received by the City by the deadline. A Vacant Home Tax Notice will be issued in March or April and any payment will be due by May 1. Payment instructions will be provided with the Notice that is issued.
Please note that this tax is separate from the Federal Underused Housing Tax.
This is general comment, and you should contact Tax Partners for any questions by sending an email to [email protected] or (905) 836-8755.
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