Toronto Vacant Home Tax Calculator 2023

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2022 Toronto Vacant Home Tax

$5,000

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The City of Toronto has enforced a Vacant Home Tax (VHT) starting from the year 2022. The VHT took effect in 2023 and required owners of homes that were vacant for six months or more in 2022 to pay this tax. The Toronto Housing Market has seen a shortage of supply in the past few years, which has been one of the factors contributing to the inflation of home prices in the city. The VHT was introduced by the city in an effort to increase the supply of housing in the city. The tax is meant to discourage homeowners from leaving their properties vacant. The City of Toronto will allocate the revenue collected from the VHT towards affordable housing initiatives. Some of the affordable housing initiatives by the City of Toronto include Open Door, Housing Now, Modular Housing Initiative, and Multiplex Housing.

Each year, the City of Toronto will issue a notice to all homeowners, asking them to declare the occupancy status of their property. All property owners must declare the occupancy status of their property by the deadline. If they fail to do so, their property may be deemed vacant, and they may have to pay the VHT even if the property was occupied throughout the year. The tax for a particular year is payable in the following year. For example, the VHT for properties deemed vacant in 2022 is payable in 2023. The tax is payable in addition to the property tax the homeowners pay annually.

The Toronto VHT is payable by homeowners whose property was declared, deemed, or determined to be vacant for six months or longer within a year. The tax does not apply to a property if:

• The property was the homeowner’s principal residence during the year
• The property was the principal residence of a tenant or a permitted occupant during the year
• The property qualifies for an exemption

Homeowners must complete the occupancy declaration by the deadline, irrespective of the occupancy status of their property. Failure to complete the declaration in time may result in fines.

The Toronto Vacant Home Tax rate is 1%, and the tax is calculated based on the Current Value Assessment (CVA) of the property. For example, the CVA of a property is $1,000,000, and the property was vacant for more than 6 months in the year 2022. Then, the Vacant Home Tax payable in 2023 is -

1% x $1,000,000 = $10,000

The following table shows the tax rate for every year starting from 2022:

The CVA is determined by the Municipal Property Assessment Corporation (MPAC). This is the assessed value of your property and is mentioned on your property tax notice as well.

All homeowners must declare the occupancy status of their home by the deadline, irrespective of the status of occupancy. The declaration should be made by the homeowners themselves or by someone acting on their behalf. For the year 2022, most homeowners received the notice for declaration in November 2022. The initial deadline to declare the occupancy status was set for February 2, 2023, but was later extended to the end of February 2023. The online portal for declaration of occupancy status in 2023 is expected to open in early November 2023. A deadline hasn’t been declared yet, but it can be expected to be set around February 2024.

Image Source: City of Toronto

The declaration can be completed online through the City’s declaration portal using your 21-digit assessment roll number and customer number, both of which can be found on the declaration notice, your property tax bill and your property tax account statement.

Alternatively, homeowners can complete and submit a paper declaration form. The paper declaration can be mailed to the city revenue services or submitted in person at the city hall or at one of the Inquiry and Payment Counters. The addresses or links to addresses can be found on the form itself.

If a homeowner fails to declare the status of their property by the deadline, the property may be deemed vacant, and the homeowner will be billed a VHT for the year. Additionally, failing to make a declaration in time or making a false declaration can result in fines of $250 to $10,000.

As of 2023, the Vacant Home Tax for the previous year is payable in three equal installments, due on May 1, June 1 and July 4, 2023. The payments can be made in the following ways:

1. MyToronto Pay: MyToronto Pay is a service provided by the City of Toronto that lets homeowners make tax payments online using electronic funds transfer, credit card, or debit card. A small convenience fee is charged for using a credit or debit card.
2. Financial Institutions: You can pay the tax directly from your bank account using online banking, telephone banking, at an ATM, or in-person at a branch. To pay using online banking, you will need the 21-digit assessment roll number on the Vacant Home Tax Notice. You can then log in to your online banking portal, select the relevant payee and make the payment.
3. Mail-In Payment: You can send in post-dated cheques payable to the ‘Treasurer, City of Toronto’ at the following address:
   
   Treasurer, City of Toronto
   Box 5000
   Toronto, ON M2N 5V1
4. Inquiry & Payment Counters and Drop Box: You can pay in person by cash, cheque, money order, or debit card at one of the Inquiry and Payment Counters located across the city. Alternatively, you can use the drop box to pay by cheque or money order.

Homes that were vacant for more than six months in a year may be exempt from the VHT if the property was vacant due to the following reasons:

• Death of the registered property owner.
• The property owner was in a care facility, such as a hospital.
• The property owner had a principal residence outside the GTA but was required to occupy the property for a total of at least six months for employment purposes.
• A court order prohibited the occupancy of the property.
• Renovation or repairs to the property.
• Transfer of the property’s legal ownership.

When a property is being sold, it is the responsibility of the property vendor as well as the purchaser to ensure that the occupancy status declaration is completed in time. Proper arrangements must be made to ensure timely filing of the declaration. The following must be noted:

• The VHT will form a lien on the property. Unpaid VHTs will be the responsibility of the purchaser.
• If a closing occurs during the declaration period, the vendor is responsible for the declaration.
• If a closing occurs after the declaration period, the purchaser is required to submit a declaration in the following year. They will qualify for an exemption under the ‘transfer of legal ownership’ condition.
• The vendor should ensure that a copy of the completed and filed declaration is provided to the purchaser.
• At closing, the vendor should also provide a statutory declaration saying that the filed property status declaration is correct.

Owners of homes deemed vacant will receive a Vacant Home Tax Notice of Assessment. If you receive such a notice and disagree with the assessment, you can file a Notice of Complaint. On doing so, the City will review the status of your property. You may file a complaint if:

• You did not file the declaration by the deadline, and your home wasn’t vacant in the year in question,
• You made an error in the declaration,
• You want to dispute the VHT levied, or
• Your property was deemed vacant through an audit or otherwise, and you wish to dispute the VHT levied in the Supplementary Vacant Home Tax Notice of Assessment.

With mortgage rates and home prices up across the country, there is a need for more affordable housing options, especially in the major cities of the country. Some cities like Vancouver, Toronto and Ottawa have already introduced vacant/empty home taxes in an attempt to increase housing supply in the cities. Meanwhile, other cities and municipalities, such as the City of Hamilton and the Regional Municipality of Peel, are also considering introducing similar taxes. Homeowners must thus ensure that their property is occupied for more than six months in a year to avoid paying these additional taxes.