Don’t be caught off guard! The City of Toronto is cracking down on vacant homes with the Vacant Home Tax. Declare your property’s occupancy status by Feb 2 to avoid being hit with a 1% tax on your home’s current value assessment.
The City of Toronto’s Vacant Home Tax (VHT) is a policy aimed at increasing the supply of housing by penalizing homeowners who leave their properties unoccupied for extended periods of time. The tax, which is set at 1% of a property’s current value assessment, will be levied on vacant Toronto residences beginning in 2023.
In order to avoid being hit with the vacant home tax, homeowners are required to declare the occupancy status of their property by February 2nd. The declaration must be submitted whether the property is vacant or not. If the property does not contain a residential unit, such as vacant land, parking space, or condominium locker, a declaration is not required. A residential unit is defined as one or more self-contained units that include a dedicated washroom and kitchen.
A property is considered vacant if it was not used as the principal residence by the owner(s) or any permitted occupants, or was unoccupied for a total of six months or more during the previous calendar year. Properties may also be deemed vacant if an owner fails to make a declaration of occupancy status as outlined in the bylaw.
It is important to note that the tax does not apply to properties that are the principal residence of the owner, properties that are the principal residence of a permitted occupant or tenant, or properties that qualify for an exemption. However, all homeowners are still required to submit a declaration of occupancy status.
Revenues collected from the Vacant Home Tax will be allocated towards affordable housing initiatives, making it an important policy for those looking to increase the availability of affordable housing in the city.
It is important for homeowners to be aware of the policy and its deadline, as failure to submit a declaration or being found in violation of the policy can result in significant financial penalties. Homeowners can download and submit a signed paper declaration form to declare their property’s occupancy status. More information about submitting a paper form can be found on the City of Toronto’s website.
In a nutshell, The City of Toronto has introduced a Vacant Home Tax to encourage more housing supply by imposing penalties on homeowners who leave their properties unoccupied for extended periods. Starting in 2023, the tax will be 1% of a property’s current value assessment and will be applied to vacant Toronto residences.
Homeowners should be aware of the policy and its deadline to avoid penalties. It is also important to note that if a residential unit was vacant in the year prior to a sale or if a seller did not file the city’s property status declaration, purchasers could be liable for penalties of up to $10,000 added to the tax account. The new law requires Toronto residential property owners to declare their occupancy status by February 2, 2023, failure to do so can result in a fine.
Besides, the bylaw does not consider units that are used for home offices, music, artist, or writer’s studio, or property management office, and these units should be exempt from the tax. The goal of this policy is to discourage owners from leaving their homes unoccupied to increase housing supply.
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